This action amends the rule to create a regulatory exception that allows children of same-sex domestic partners living overseas to maintain their Federal Employees Health Benefits (FEHB) and Federal Employees Dental and Vision Program (FEDVIP) coverage until September 30, 2018. Due to a recent Supreme Court decision, as of January 1, 2016, coverage of children of same-sex domestic partners under the FEHB Program and FEDVIP will generally only be allowed if the couple is married, as discussed in Benefits Administration Letter (BAL) 15-207 dated October 5, 2015. OPM recognizes there are additional requirements placed on overseas federal employees that may not apply to other civilian employees with duty stations in the United States making it difficult to travel to the United States to marry same-sex partners.

DATES:

This rule is effective on December 2, 2016.

FOR FURTHER INFORMATION CONTACT:

Michael W. Kaszynski, Senior Policy Analyst at Michael.Kaszynski@opm.gov or (202) 606-0004. You may also submit comments using the Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

SUPPLEMENTARY INFORMATION:I. Background

Effective January 1, 2014, the Office of Personnel Management (OPM) published the “Federal Employees Health Benefits Program and Federal Employees Dental and Vision Insurance Program: Expanding Coverage of Children; Federal Flexible Benefits Plan: Pre-Tax Payment of Health Benefits Premiums: Conforming Amendments” final rule (78 FR 64873) to extend FEHB and FEDVIP coverage to children of same-sex domestic partners of Federal employees and annuitants who would marry their partners but live in states that do not allow same-sex couples to marry. As the result of the June 26, 2015, Supreme Court Obergefell v. Hodges decision, all U.S. states now allow same-sex couples to marry. Accordingly, as of January 2016, coverage of an enrollee's stepchild(ren) is only allowed if the couple is married.

II. Discussion of Interim Rule

This rule amends §§ 890.302 and 894.101 of title 5, Code of Federal Regulations. The amendments will allow an employing agency to request, and for OPM to grant, a continued coverage exception for children of an employee's same-sex domestic partner living outside the United States. Any coverage under such an exception will not extend beyond September 30, 2018. The OPM recognizes there are additional requirements placed on overseas employees that may not apply to other civilian employees with duty stations in the United States making it difficult to travel to the United States to marry same-sex partners. Therefore, OPM is creating the authority to allow an exception for Federal employees in a domestic partnership and living outside of the United States. If requested by an enrollees' agency, coverage of children of same-sex domestic partners can be continued under self and family or self plus one enrollment in the FEHB and FEDVIP Programs. This continued coverage exception will be available to overseas employees until September 30, 2018.

Under Section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 551, et seq.) a general notice of proposed rulemaking is required unless an agency, for good cause, finds that notice and public comment thereon are impracticable, unnecessary, or contrary to the public interest. In addition, the APA exempts interpretative rules from proposed rulemaking procedures. This rule continues benefit eligibility past January 1, 2016, for children of same-sex domestic partners of employees living abroad, which require OPM to amend current regulations in an expeditious manner. Therefore, OPM has concluded that delaying implementation of this rule due to a full notice and public comment period would be impracticable and contrary to the public interest since the time it would have taken to issue proposed and final rules would have significantly delayed the implementation of this important regulatory change. For the foregoing reasons, OPM asserts that good cause exists to implement this rule as an interim rule under the APA, 5 U.S.C. 553(b) and accordingly, adopts this rule on that basis.

Regulatory Impact Analysis

OPM has examined the impact of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review) and Executive Order 13563, which directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public, health, and safety effects, distributive impacts, and equity). A regulatory impact analysis must be prepared for major rules with economically significant effects of $100 million or more in any one year. This rule is not considered a major rule because OPM estimates there are a relatively small number of overseas enrollments that will be affected. Premium cost increases for this regulatory change will not equal or exceed $100 million.

Paperwork Reduction Act

This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13.

Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.” To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” I certify that these regulations will not have a significant economic impact on a substantial number of small entities because they will apply only to overseas Federal employees, annuitants and their former spouses who are in same-sex domestic partnerships and are not married.

2. In § 890.302, revise paragraph (b)(2) to read as follows:§ 890.302 Coverage of family members.

(b)* * *

(2) Meaning of stepchild. Except as provided in paragraph (b)(5) of this section, for purposes of this part, the term “stepchild” refers to the child of an enrollee's spouse or domestic partner and shall continue to refer to such child after the enrollee's divorce from the spouse, termination of the domestic partnership, or death of the spouse or domestic partner, so long as the child continues to live with the enrollee in a regular parent-child relationship. Coverage of children of domestic partners terminates on January 1, 2016, unless an agency requests, and OPM grants, the agency a continued coverage exception for enrollees living overseas. This continued coverage exception will be available to overseas employees and all coverage, under such an exception, will end on September 30, 2018.

PART 894—FEDERAL EMPLOYEES DENTAL AND VISION INSURANCE PROGRAM3. The authority citation for part 894 continues to read as follows:Authority:

4. In § 894.101, the definition of “Stepchild” is revised to read as follows:§ 894.101 Definitions.

Stepchild means:

(1) Except as provided in paragraph (2), the child of an enrollee's spouse or domestic partner and shall continue to refer to such child after the enrollee's divorce from the spouse, termination of the domestic partnership, or death of the spouse or domestic partner, so long as the child continues to live with the enrollee in a regular parent-child relationship.

(2) The child of an enrollee and a domestic partner who otherwise meet the requirements of paragraphs (1) through (8) of the definition of Domestic partnership in this section, but live in a state that has authorized marriage by same-sex couples prior to the first day of Open Season, shall not be considered a stepchild who is the child of a domestic partner in the following plan year. The determination of whether a state's marriage laws render a child ineligible for coverage as a stepchild who is the child of a domestic partner shall be made once annually, based on the law of the state where the same-sex couple lives on the last day before Open Season begins for enrollment for the following year. A child's eligibility for coverage as a stepchild who is the child of a domestic partner in a particular plan year shall not be affected by a mid-year change to a state's marriage law or by the couple's relocation to a different state. For midyear enrollment changes involving the addition of a new stepchild, as defined by this regulation, outside of Open Season, the determination of whether a state's marriage laws render the child ineligible for coverage shall be made at the time the employee notifies the employing office of his or her desire to cover the child. Coverage of children of domestic partners terminates on January 1, 2016, unless an agency requests, and OPM grants, the agency a continued coverage exception for enrollees living overseas. Continued coverage exceptions will only be granted to children of domestic partners living overseas and all coverage exceptions will end on September 30, 2018.

The U.S. Nuclear Regulatory Commission (NRC) is amending its regulations to make miscellaneous corrections. The amendments include correcting a senior NRC management position title; correcting terminology for consistency in NRC regulations; and correcting contact information, references, typographical errors, and misspellings. This document is necessary to inform the public of these non-substantive amendments to the NRC's regulations.

DATES:

This rule is effective December 30, 2016.

ADDRESSES:

Please refer to Docket ID NRC-2016-0229 when contacting the NRC about the availability of information for this final rule. You may obtain publicly-available information related to this final rule by any of the following methods:

• Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2016-0229. Address questions about NRC dockets to Carol Gallagher; telephone: 301-415-3463; email: Carol.Gallagher@nrc.gov. For technical questions, please contact the individual listed in the FOR FURTHER INFORMATION CONTACT section of this final rule.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available NRC documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “ADAMS Public Documents” and then select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to pdr.resource@nrc.gov. There are no NRC documents referenced in this document.

The NRC is amending its regulations in parts 2, 10, 26, 30, 40, 50, 55, 61, 63, 70, 71, 72, 73, 74, and 100 of title 10 of the Code of Federal Regulations (10 CFR) to make miscellaneous corrections. The amendments include correcting a senior NRC management position title; correcting terminology for consistency in NRC regulations; and correcting contact information, references, typographical errors, and misspellings. This document is necessary to inform the public of these non-substantive amendments to the NRC's regulations.

II. Summary of Changes10 CFR Part 2

Contact Information Correction. This final rule changes the facsimile number for service of documents made upon the NRC staff from “301-415-3725” to 301-415-3200.”

10 CFR Part 10

Position Title Correction. This final rule removes all references to the incorrect position title “Deputy Executive Director for Corporate Management and Chief Information Officer” and replaces them with the correct position title “Deputy Executive Director for Materials, Waste, Research, State, Tribal, Compliance, Administration, and Human Capital Programs.”

10 CFR Part 26

Correct Terminology. This final rule removes all references to “blind samples” and “blind performance specimens” and replaces them with “blind performance test samples.”

10 CFR Parts 30, 40, 61, 63, 70, 72, and 100

Correct Terminology. This final rule removes all references to “ground water” and “ground-water” and replaces them with “groundwater.”

10 CFR Part 50

Correct Reference. In § 50.23, this final rule removes the incorrect reference “§ 50.91” and replaces it with the correct reference “§ 50.92.”

Correct Typographical Error. In § 50.34(a)(3)(i), this final rule capitalizes “Appendix” at the beginning of the second sentence.

Correct Misspelling. In section IV of appendix C, this final rule removes the misspelled term “Commiasion” and replaces it with the correct term “Commission.”

Correct Reference. In section II.A of appendix J, this final rule removes the incorrect reference “§ 50.2(v)” and replaces it with the correct reference “§ 50.2.”

10 CFR Part 55

Correct Misspelling. In § 55.59(c)(3)(i)(G)(3), this final rule removes the misspelled term “lead-rate” and replaces it with the correct term “leak-rate.”

10 CFR Part 71

Correct Typographical Error. In § 71.71(c)(1), this final rule changes the second column heading in the table from “Total insolation for a 12-hour period (g cal/cm2” to “Total insolation for a 12-hour period (g cal/cm2).”

10 CFR Part 72

Correct Reference. In § 72.74(b), this final rule removes the incorrect reference “§ 73.21(g)(3)” and replaces it with the correct reference “§ 73.22(f)(3).”

10 CFR Part 73

Correct Misspelling. In § 73.56(o)(2)(i), this final rule removes the misspelled term “rtifying” and replaces it with the correct term “certifying.”

10 CFR Part 74

Correct Reference. In § 74.11(b), this final rule removes the incorrect reference “§ 73.21(g)(3)” and replaces it with the correct reference “§ 73.22(f)(3).”

III. Rulemaking Procedure

Under the Administrative Procedure Act (5 U.S.C. 553(b)), an agency may waive publication in the Federal Register of a notice of proposed rulemaking and opportunity for comment requirements if it finds, for good cause, that they are impracticable, unnecessary, or contrary to the public interest. As authorized by 5 U.S.C. 553(b)(3)(B), the NRC finds good cause to waive notice and opportunity for comment on these amendments, because notice and opportunity for comment are unnecessary. The amendments will have no substantive impact and are of a minor and administrative nature dealing with corrections to certain CFR sections related only to management, organization, procedure, and practice. Specifically, the revisions include correcting a senior NRC management position title; correcting terminology for consistency in NRC regulations; and correcting contact information, references, typographical errors, and misspellings. The amendments do not require action by any person or entity regulated by the NRC, and do not change the substantive responsibilities of any person or entity regulated by the NRC.

IV. Environmental Impact: Categorical Exclusion

The NRC has determined that this final rule is the type of action described in 10 CFR 51.22(c)(2), which categorically excludes from environmental review rules that are corrective or of a minor, nonpolicy nature and do not substantially modify existing regulations. Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this rule.

V. Paperwork Reduction Act Statement

This final rule does not contain a collection of information as defined in the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and, therefore, is not subject to the requirements of the Paperwork Reduction Act of 1995.

Public Protection Notification

The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.

VI. Plain Writing

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883).

VII. Backfitting and Issue Finality

The NRC has determined that the amendments in this final rule do not constitute backfitting and are not inconsistent with any of the issue finality provisions in 10 CFR part 52. The amendments are non-substantive in nature, including correcting a senior NRC management position title; correcting terminology for consistency in NRC regulations; and correcting contact information, references, typographical errors, and misspellings. They impose no new requirements and make no substantive changes to the regulations. The amendments do not involve any provisions that would impose backfits as defined in 10 CFR chapter I, or would be inconsistent with the issue finality provisions in 10 CFR part 52. For these reasons, the issuance of the rule in final form would not constitute backfitting or represent a violation of any of the issue finality provisions in 10 CFR part 52. Therefore, the NRC has not prepared any additional documentation for this correction rulemaking addressing backfitting or issue finality.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR parts 2, 10, 26, 30, 40, 50, 55, 61, 63, 70, 71, 72, 73, 74, and 100:

PART 2—AGENCY RULES OF PRACTICE AND PROCEDURE1. The authority citation for part 2 continues to read as follows:Authority:

§ 2.305 [Amended]2. In § 2.305, paragraph (g)(1), remove the number “301-415-3275” and add in its place the number “301-415-3200”.PART 10—CRITERIA AND PROCEDURES FOR DETERMINING ELIGIBILITY FOR ACCESS TO RESTRICTED DATA OR NATIONAL SECURITY INFORMATION OR AN EMPLOYMENT CLEARANCE3. The authority citation for part 10 continues to read as follows:Authority:

4. In part 10, wherever it may occur, remove the phrase “Deputy Executive Director for Corporate Management and Chief Information Officer” and add in its place the phrase “Deputy Executive Director for Materials, Waste, Research, State, Tribal, Compliance, Administration, and Human Capital Programs”.PART 26—FITNESS FOR DUTY PROGRAMS5. The authority citation for part 26 continues to read as follows:Authority:

6. In part 26, wherever they may occur, remove the phrases “blind samples” and “blind performance specimens” and add in their place the phrase “blind performance test samples”.PART 30—RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL7. The authority citation for part 30 continues to read as follows:Authority:

8. In part 30, wherever it may occur, remove the term “ground-water” and add in its place the term “groundwater”.PART 40—DOMESTIC LICENSING OF SOURCE MATERIAL9. The authority citation for part 40 continues to read as follows:Authority:

10. In part 40, wherever they may occur, remove the terms “ground water” and “ground-water” and add in their place the term “groundwater”.PART 50—DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES11. The authority citation for part 50 continues to read as follows:Authority:

§ 50.23 [Amended]12. In § 50.23, remove the reference “§ 50.91” and add in its place the reference “§ 50.92”.13. In § 50.34, paragraph (a)(3)(i), revise the last sentence to read as follows:§ 50.34 Contents of applications; technical information.

(a) * * *

(3) * * *

(i) * * * Appendix A, General Design Criteria for Nuclear Power Plants, establishes minimum requirements for the principal design criteria for water-cooled nuclear power plants similar in design and location to plants for which construction permits have previously been issued by the Commission and provides guidance to applicants for construction permits in establishing principal design criteria for other types of nuclear power units;

Appendix C to Part 50 [Amended]14. In section IV of appendix C to part 50, remove the term “Commiasion” and add in its place the term “Commission”.Appendix J to Part 50 [Amended]15. In section II.A of appendix J to part 50, remove the reference “§ 50.2(v)” and add in its place the reference “§ 50.2”. PART 55—OPERATORS' LICENSES16. The authority citation for part 55 continues to read as follows:Authority:

§ 55.59 [Amended]17. In § 55.59(c)(3)(i)(G)(3) remove the term “lead-rate” and add in its place the term “leak-rate”.PART 61—LICENSING REQUIREMENTS FOR LAND DISPOSAL OF RADIOACTIVE WASTE18. The authority citation for part 61 continues to read as follows:Authority:

19. In part 61, wherever it may occur, remove the term “ground water” and add in its place the term “groundwater”.PART 63—DISPOSAL OF HIGH-LEVEL RADIOACTIVE WASTES IN A GEOLOGIC REPOSITORY AT YUCCA MOUNTAIN, NEVADA20. The authority citation for part 63 continues to read as follows:Authority:

21. In part 63, wherever they may occur, remove the terms “ground water” and “ground-water” and add in their place the term “groundwater”.PART 70—DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL22. The authority citation for part 70 continues to read as follows:Authority:

23. In part 70, wherever it may occur, remove the term “ground-water” and add in its place the term “groundwater”.PART 71—PACKAGING AND TRANSPORTATION OF RADIOACTIVE MATERIAL24. The authority citation for part 71 continues to read as follows:Authority:

27. In part 72, wherever it may occur, remove the term “ground-water” and add in its place the term “groundwater”.§ 72.74 [Amended]28. In § 72.74(b), remove the reference “§ 73.21(g)(3)” and add in its place the reference “§ 73.22(f)(3)”.PART 73—PHYSICAL PROTECTION OF PLANTS AND MATERIALS29. The authority citation for part 73 continues to read as follows:Authority:

§ 73.56 [Amended]30. In § 73.56(o)(2)(i), remove the term “rtifying” and add in its place the term “certifying”.PART 74—MATERIAL CONTROL AND ACCOUNTING OF SPEICAL NUCLEAR MATERIAL31. The authority citation for part 74 continues to read as follows:Authority:

§ 74.11 [Amended]32. In § 74.11(b), remove the reference “§ 73.21(g)(3)” and add in its place the reference “§ 73.22(f)(3)”.PART 100—REACTOR SITE CRITERIA33. The authority citation for part 100 continues to read as follows:Authority:

These special conditions are issued for the Gulfstream Aerospace Corporation (Gulfstream) Model GVII-G500 airplane. This airplane will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. This design feature is electronic flight-control-system (EFCS) mode annunciation. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

DATES:

This action is effective on Gulfstream on December 2, 2016. We must receive your comments by January 17, 2017.

ADDRESSES:

Send comments identified by docket number FAA-2015-1495 using any of the following methods:

• Hand Delivery or Courier: Take comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

• Fax: Fax comments to Docket Operations at 202-493-2251.

Privacy: The FAA will post all comments it receives, without change, to http://www.regulations.gov/, including any personal information the commenter provides. Using the search function of the docket Web site, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT's complete Privacy Act Statementcan be found in the Federal Register published on April 11, 2000 (65 FR 19477-19478), as well as at http://DocketsInfo.dot.gov/.

Docket: Background documents or comments received may be read at http://www.regulations.gov/ at any time. Follow the online instructions for accessing the docket or go to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

The FAA has determined that the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the Federal Register.

Comments Invited

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.

Background

On March 29, 2012, Gulfstream applied for a type certificate for their new Model GVII-G500 airplane. The Model GVII-G500 airplane will be a business jet capable of accommodating up to 19 passengers. It will incorporate a low, swept-wing design with winglets and a T-tail. The powerplant will consist of two aft-fuselage-mounted Pratt & Whitney turbofan engines.

Type Certification Basis

Under Title 14, Code of Federal Regulations (14 CFR) 21.17, Gulfstream must show that the Model GVII-G500 airplane meets the applicable provisions of 14 CFR part 25, as amended by Amendments 25-1 through 25-129.

If the Administrator finds that the applicable airworthiness regulations (i.e., part 25) do not contain adequate or appropriate safety standards for the Model GVII-G500 airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, Model GVII-G500 airplanes must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36. The FAA must issue a finding of regulatory adequacy under section 611 of Public Law 92-574, the “Noise Control Act of 1972.”

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.17(a)(2).

Novel or Unusual Design Features

The Model GVII-G500 airplane will incorporate the following novel or unusual design feature:

Electronic flight-control-system mode annunciation.

Discussion

These special conditions for flight-control-system mode annunciation, applicable to the Gulfstream Model GVII-G500 airplane, require that suitable mode annunciation be provided to the flightcrew for events that significantly change the operating mode of the system but do not merit the classic “failure warning.”

These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

Applicability

As discussed above, these special conditions are applicable to the Gulfstream Model GVII-G500 airplane. Should Gulfstream apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.

Conclusion

This action affects only a certain novel or unusual design feature on one model series of airplane. It is not a rule of general applicability.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, the FAA has determined that prior public notice and comment is unnecessary, and good cause exists for adopting these special conditions upon publication in the Federal Register.

The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

List of Subjects in 14 CFR Part 25

Aircraft, Aviation safety, Reporting and recordkeeping requirements.

The authority citation for these special conditions is as follows:

Authority:

49 U.S.C. 106(g), 40113, 44701, 44702, 44704.

The Special Conditions

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Gulfstream Model GVII-G500 airplanes:

If the design of the flight-control system has multiple modes of operation, a means must be provided to indicate to the flightcrew any mode that significantly changes or degrades the normal handling or operational characteristics of the airplane.

We are adopting a new airworthiness directive (AD) for all The Boeing Company Model 787-8 and 787-9 airplanes. This AD requires repetitive cycling of either the airplane electrical power or the power to the three flight control modules (FCMs). This AD was prompted by a report indicating that all three FCMs might simultaneously reset if continuously powered on for 22 days. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective December 2, 2016.

The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of December 2, 2016.

We must receive comments on this AD by January 17, 2017.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9436.

Examining the AD Docket

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9436; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We have received reports indicating that an FCM will reset if continuously powered on for 22 days. This condition, if not corrected, could result in simultaneous resets of all three FCMs, which could result in flight control surfaces not moving in response to flight crew inputs for a short time and consequent temporary loss of controllability. We are issuing this AD to correct the unsafe condition on these products.

Related Service Information Under 1 CFR Part 51

We reviewed Boeing Alert Service Bulletin B787-81205-SB270040-00, Issue 001, dated November 25, 2016. The service information describes procedures for cycling the airplane electrical power and cycling power to the three FCMs. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination

We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

AD Requirements

This AD requires accomplishing the actions specified in the service information described previously. For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9436.

Interim Action

We consider this AD interim action. Boeing and its suppliers are developing a terminating solution to address the identified unsafe condition. Once this terminating solution is developed, approved, and available, we might consider additional rulemaking.

FAA's Justification and Determination of the Effective Date

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because simultaneous resets of all three FCMs could result in flight control surfaces not moving in response to flight crew inputs for a short time and consequent temporary loss of controllability. Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

Comments Invited

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number FAA-2016-9436 and Directorate Identifier 2016-NM-197-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

Costs of Compliance

We estimate that this AD affects 99 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

Estimated CostsActionLabor costCost per productCost on U.S.

operators

Cycling of either the airplane electrical power or power to the FCMs1 work-hour × $85 per hour = $85 per cycle$85 per cycle$8,415 per cycle.Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

Regulatory Findings

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD applies to all The Boeing Company Model 787-8 and 787-9 airplanes, certificated in any category.

(d) Subject

Air Transport Association (ATA) of America Code 27, Flight Controls.

(e) Unsafe Condition

This AD was prompted by a report indicating that all three flight control modules (FCMs) might simultaneously reset if continuously powered on for 22 days. We are issuing this AD to prevent simultaneous resets of all three FCMs, which could result in flight control surfaces not moving in response to flight crew inputs for a short time and consequent temporary loss of controllability.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Reset of FCMs

Within 7 days after the effective date of this AD, do the action specified in paragraph (g)(1) or (g)(2) of this AD. Repeat the action specified in paragraph (g)(1) or (g)(2) of this AD thereafter at intervals not to exceed 21 days.

(2) Cycle power to the left, center, and right FCMs, in accordance with “Option 2” of the Accomplishment Instructions of Boeing Alert Service Bulletin B787-81205-SB270040-00, Issue 001, dated November 25, 2016.

(h) Credit for Previous Actions

This paragraph provides credit for the actions specified in paragraph (g)(2) of this AD, if those actions were performed before the effective date of this AD using the service information specified in paragraph (h)(1), (h)(2), or (h)(3) of this AD.

(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (j)(1) of this AD. Information may be emailed to: 9-ANM-Seattle-ACO-AMOC-Requests@faa.gov.

(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

(4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (i)(4)(i) and (i)(4)(ii) of this AD apply.

(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or sub-step is labeled “RC Exempt,” then the RC requirement is removed from that step or sub-step. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

The Commission grants the petition of gasoline dispenser manufacturer Gilbarco, Inc. (“Gilbarco”) requesting permission for ethanol flex fuel retailers to post ethanol flex fuel rating labels that differ from size and shape specifications in the Commission's Rule for Automotive Fuel Ratings, Certification and Posting (“Rule”). The Commission grants the partial exemption without a notice and comment period because “for good cause” the Commission finds that notice and comment is unnecessary in this case. The Commission previously granted similar requests from Gilbarco and other dispenser manufacturers without notice and comment procedures.

The Rule provides procedures for determining, certifying, and posting, through fuel dispenser labels, a rating for automotive fuels intended for consumer sale. As originally published, the Rule required only an octane rating for automotive gasoline.1 Pursuant to section 1501 of the Energy Policy Act of 1992, 106 Stat. 2776, the Commission then amended the Rule in 1993 to require a rating disclosure for liquid alternative fuels, including gasoline-ethanol blends above 10 percent ethanol (“Ethanol Flex Fuels”).2 On January 14, 2016, the Commission established a new Ethanol Flex Fuel rating and label, effective July 14, 2016.3

Section 306.10 of the Rule requires that retailers post on automotive fuel dispensers a fuel rating label for each kind of automotive fuel sold from the dispenser. Retailers must post labels conspicuously on the dispenser in consumers' full view and as near as reasonably practical to the fuel price.

Section 306.12 of the Rule details label color scheme, shape, size, textual content, and font type and point size. Ethanol Flex Fuel labels must be orange, rectangular, and 3 inches (7.62 cm) wide x 2 1/2 inches (6.35 cm) long. In addition, the percentage of ethanol content must be printed in orange font within a 1 inch (2.54 cm) deep black band across the top of the label. Below the band, the label must state “Use Only in Flex Fuel Vehicles/May Harm Other Engines.”

Gibarco now requests an exemption for smaller label dimensions for Ethanol Flex Fuel button labels and to include the word “Press” in the label's black band. In addition, Gilbarco requests permission to post dome-shaped button labels in lieu of rectangular labels for certain dispenser designs. The proposed rectangular labels are 2.38 inches (6.05 cm) wide x 2.27 inches (5.77 cm) long, and the dome-shaped labels have an outside dimension of 2.378 inches (6.04 cm) wide x 2.717 (6.90 cm) inches long. In addition, the black band across the top of the dome-shaped label is 0.277 inches (0.70 cm) wider than specified in the Rule. The labels' background and text insertions otherwise comply with the Rule's color scheme, content, and font type and point size requirements.

IV. Discussion

The Commission reviewed mock-ups of the proposed rectangular and dome-shaped labels and concludes that the proposed labels adequately meet the Rule's labeling requirements by providing clear and conspicuous disclosure of all the required information and maintaining the Rule's color scheme and font type and point size requirements. Moreover, the Commission's experience with similar exemptions does not indicate that button labels confuse consumers or otherwise impede comprehension of the fuel rating. To the contrary, these labels may increase the likelihood that consumers see the fuel rating because they must choose and press the button before fueling.

Furthermore, pursuant to Rule 1.26, the Commission for good cause finds that notice and comment is unnecessary in this case because the exemption involves a technical and minor deviation from the Rule's labeling requirements and does not impose any new legal obligations on parties subject to the Rule.5 Moreover, the Commission has previously granted similar exemptions from the Rule's labeling requirements, and this exemption is consistent with those prior determinations.6

5See 16 CFR 1.26. For these reasons, the Commission also finds good cause for making this exemption effective immediately.

Therefore, the Commission grants Gilbarco and retailers permission to use the proposed rectangular and dome-shaped button labels on Ethanol Flex Fuel dispenser buttons, provided that Gilbarco and retailers comply with the Rule's specifications in all other respects.

We are revising the criteria in the Listing of Impairments (listings) that we use to evaluate claims involving human immunodeficiency virus (HIV) infection in adults and children under titles II and XVI of the Social Security Act (Act). We also are revising the introductory text of the listings that we use to evaluate functional limitations resulting from immune system disorders. The revisions reflect our program experience, advances in medical knowledge, our adjudicative experience, recommendations from a commissioned report, and comments from medical experts and the public.

We are revising and making final the rule for evaluating HIV infection we proposed in a Notice of Proposed Rulemaking (NPRM) published in the Federal Register on February 26, 2014 (79 FR 10730), and a correction to the proposed rule on March 25, 2014 (79 FR 16250). Even though this rule will not go into effect until January 17, 2017, for clarity, we refer to it in this preamble as the “final” rule. We are making several changes in this final rule from the NPRM based upon some of the public comments we received. We are also making minor editorial changes throughout this final rule. We explain these changes below in the “Summary of Public Comments on the NPRM” section of this preamble.

The preamble to the NPRM provided an explanation of the changes from the current rules and our reasons for proposing those changes. To the extent that we are adopting the proposed rule as published, we are not repeating that information here. You can view the NPRM by visiting http://www.regulations.gov and searching for document SSA-2007-0082.

Why are we revising the listings for evaluating HIV infection?

We are revising the listings for evaluating HIV infection to reflect our program experience and advances in medical knowledge since we last revised the listings related to HIV infection, recommendations from a commissioned report,1 and a number of public comments. We received comments from medical experts and the public at an outreach policy conference, in response to an Advance Notice of Proposed Rulemaking (ANPRM),2 and in response to the NPRM. Although we published final rules for immune system disorders on March 18, 2008, that included changes to listings 14.08 and 114.08,3 the criteria in the current HIV infection listings are not substantively different from the criteria in the final rules we published on July 2, 1993.4 We indicated in the preamble to those rules that we would carefully monitor these listings to ensure that they continue to meet program purposes, and that we would update them if warranted.

1 Institute of Medicine. (2010). HIV and Disability: Updating the Social Security Listings. Washington, DC: The National Academies Press.

2 73 FR 14409.

3 73 FR 14570.

4 58 FR 36051.

Other Information

In the NPRM, we proposed to remove listing 114.08H for evaluating growth disturbance with an involuntary weight loss (or failure to gain weight at an appropriate rate for age) that meets specified criteria. We proposed instead to evaluate this impairment under a growth impairment listing in 100.00 or a digestive system listing in 105.00. On April 13, 2015, we published a final rule for growth disorders and weight loss in children in 100.00 that retained a listing in 114.00 for growth failure due to HIV immune suppression.5 We are repeating that listing here for clarity. We have redesignated the listing as 114.11I and the related introductory text as 114.00F7.

5 80 FR 19522.

Summary of Public Comments on the NPRM

In the NPRM, we provided the public with a 60-day comment period, and we subsequently extended the comment period to May 27, 2014. We received 68 comments from 22 commenters. The commenters included advocacy groups, legal services organizations, State agencies, a national group representing disability examiners in State agencies that make disability determinations for us, medical organizations, and individual members of the public.

We carefully considered all of the comments relevant to this rulemaking. We have condensed and summarized the comments below. We present the commenters' concerns and suggestions, respond to all significant issues that are within the scope of this rule, and provide our reasons for adopting or not adopting the recommendations in our responses below.

We received several comments supporting our proposed changes. We appreciate those comments; however, we did not include them. Other comments were on subjects not related to the proposed rule. Although we read and considered these comments, we did not summarize or respond to them below because they are outside the scope of this rulemaking.

Documentation

Comment: Several commenters disagreed with our proposal to remove guidance in the current introductory text that instructed our adjudicators how to consider documentation of HIV infection and manifestations of HIV infection that does not include the results of definitive laboratory testing. Two of these commenters urged us to retain language from the introductory text that explains that we will consider documentation of HIV infection and manifestations of HIV infection that is consistent with the prevailing state of medical knowledge and clinical practice. They also noted that one of the examples of a manifestation of HIV infection in 14.11I, lipodystrophy, is generally diagnosed by clinical observations instead of by a laboratory test. Another commenter requested clarification about making a disability determination when we cannot obtain definitive evidence or a persuasive report from a physician of a manifestation of an HIV infection.

Response: We agree with these comments and have retained the current language in the introductory text for non-definitive documentation of HIV infection and manifestations of HIV infection. This guidance is found in 14.00F1c(ii) and 114.00F1c(ii) for documentation of HIV infection, and 14.00F2c(ii) and 114.00F2c(ii) for manifestations of HIV infection. We have also noted in 14.00F3 and 114.00F3 that, to establish a diagnosis of the disorders that we discuss in the section, we will accept other generally acceptable methods that are consistent with the prevailing state of medical knowledge and clinical practice. Retaining this language provides adjudicators with the information needed to make a disability determination when we cannot obtain either definitive evidence or a persuasive report from a physician of HIV infection or a manifestation of HIV infection.

We have removed the statement “we will not purchase laboratory testing to establish whether you have HIV infection” from listing sections 14.00F1b and 114.00F1b, because it implies that we will never pay for diagnostic laboratory HIV testing. Instead, we have clarified that while we will not pay for diagnostic laboratory HIV testing as standard practice because our rules do not require claimants to have definitive laboratory testing documenting the existence of HIV to qualify for disability, we will purchase laboratory HIV testing under limited circumstances.

Specifically, if the existing evidence is not sufficient for us to make a disability determination decision, and no other acceptable documentation exists, we will purchase the examinations or laboratory tests necessary to make a determination in your claim. At times, a specific laboratory test may be necessary to make a determination in a claim, such as a CD4 count that helps to predict clinical outcomes for a person living with HIV.

Similarly, we removed the proposed language in 14.00F2b and 114.00F2b, and that indicated we would not purchase laboratory testing for manifestations of HIV infection. These sections now clarify we will purchase such laboratory tests when they are a necessary part of the disability determination process.

Comment: One commenter asked whether we will use the degree of viremia (the presence of viruses in the blood) for the HIV p24 antigen (p24Ag) test to assess the severity of infection.

Response: We did not make any changes in response to this comment. We cannot use HIV p24Ag to assess the severity of HIV infections because it is an inadequate indicator of immune suppression. In this final rule, we include criteria based on CD4 levels, which is a better measurement of immune suppression. However, we may accept a positive finding on HIV p24Ag testing as documentation of an HIV infection.

Comment: One commenter was concerned that we are making assumptions about individuals and their levels of function based on blood tests and counts.

Response: We have not made any changes in response to this comment. We do not, and will not, require blood tests in order for an HIV-related impairment to satisfy a listing or to find a person with an HIV infection to be disabled. Only listings 14.11F, 14.11G, 114.11F, and 114.11I require a CD4 count to meet the listing. We have set these criteria based on recommendations from experts in the field of HIV infection who believe that it would be appropriate to find people whose CD4 counts meet the requirements are disabled. However, these listings are not the only way that we may find a person with HIV infection to be disabled. If a person's impairment(s) does not meet or equal the severity of a listing, we may find that he or she is disabled at later steps of the sequential evaluation process.

Comment: One commenter noted that proposed listings 14.11A-E and 114.11A-E rely heavily on information located in the proposed introductory text for proper application and understanding. This commenter recommended we revise these listings to include this guidance. The commenter also provided language for these suggested revisions.

Response: We have adopted the commenter's suggested revisions. We have added the commenter's language to clarify that we only consider multicentric Castleman disease under 14.11A and 114.11A. In addition, we have also incorporated the commenter's suggestion to note that the values required by 14.11G do not have to be measured on the same date. We have also made appropriate conforming changes to the introductory text.

Comment: One commenter opined that our proposed revisions discriminate against the poor, as the criteria include medical tests, such as HIV nucleic acid tests by polymerase chain reaction and examination of cerebral spinal fluid, and hospitalizations that many individuals cannot afford and that we are not willing to purchase. The commenter notes that, “although some of the simpler tests may be available through public health departments and charity clinics, these organizations usually cannot afford to provide any of the more expensive tests and charity clinics are not . . . available in many areas.” The commenter also requests that we delete the hospitalization criterion from the proposed listings, as we will not pay for hospitalizations.

Response: We did not adopt this comment. The Social Security Act and our regulations require medical evidence to establish a medically determinable impairment. We use medical evidence generally accepted in the medical community and available in medical records to establish and evaluate an impairment. We look at all available evidence about all of the claimant's impairments, not just information about a particular allegation such as HIV infection. We may find a person disabled even if he or she does not have a medical diagnosis for his or her impairments when applying for benefits, as long as we are able to establish a medically determinable severe physical or mental impairment or combination of impairments that meets the duration requirement.

In response to public comments and as discussed above, we have retained the guidance in the introductory text that explains we will accept non-definitive evidence of HIV infection or manifestations of HIV infection. This will allow us to establish HIV infection and manifestations of HIV infection more easily without definitive tests. We will accept a persuasive report from a physician that a positive diagnosis of your HIV infection was confirmed by an appropriate laboratory test(s), such as those described in 14.00F1a. To be persuasive, this report must state that you had the appropriate definitive laboratory test(s) for diagnosing your HIV infection and provide the results. The report must also be consistent with the remaining evidence of record.

We may also document HIV infection by the medical history, clinical and laboratory findings, and diagnoses indicated in the medical evidence, provided that this documentation is consistent with the rest of the medical evidence and the prevailing state of medical knowledge and clinical practice. For example, we will accept a diagnosis of HIV infection without definitive laboratory evidence of the HIV infection if you have an opportunistic disease that is predictive of a defect in cell-mediated immunity (for example, toxoplasmosis of the brain or Pneumocystis pneumonia (PCP)), and there is no other known cause of diminished resistance to that disease (for example, long-term steroid treatment or lymphoma). In such cases, we will make every reasonable effort to obtain full details of the history, medical findings, and results of testing. In the NPRM, we had proposed to accept only definitive tests as evidence of HIV infection or manifestations of HIV infection. Many of the tests that the commenter specifically named were these definitive tests. Allowing adjudicators to establish HIV infection or manifestations of HIV infection without the requirement of a definitive test result helps to allay concerns about the accessibility of tests that we had proposed to require.

Furthermore, the hospitalization criterion is just one of multiple ways adjudicators can find a person is disabled in the sequential evaluation process.6 The hospitalization criterion is an advantage to a person who applies for disability benefits because it adds another way we may find him or her disabled at the third step of the sequential evaluation process, but it is not the only way we can find a person with HIV infection to be disabled. If a person with HIV infection meets our requirements for disability, but has not been hospitalized to the extent required by our listings, we can find that he or she is disabled based on a finding of medical equivalence, by meeting other listings, or at a later step in our adjudication process. These other mechanisms for finding a person is disabled help to account for the variation of claimants' access to medical treatment.

6 See 20 CFR 404.1520 and 416.920 for the sequential evaluation process we use to determine disability for adults and 20 CFR 416.924 for the sequential evaluation process we use to determine disability for children.

CD4 Counts

Comment: A number of commenters provided suggestions related to our use of CD4 counts versus CD4 percentages in the proposed listings. One commenter requested that we provide a CD4 percentage for 14.00F1 that would be equivalent to an absolute CD4 count of 50 cells/mm3 or less. Two commenters requested that we make changes to proposed 114.11F in order to have greater consistency between the childhood and adult HIV listings. These commenters stated that in the proposed listings, children from birth to the attainment of age 5 may rely on a CD4 percentage of less than 15 percent to establish disability under 114.11F1 or 114.11F2, while children age 5 to the attainment of age 18 may rely only on an absolute CD4 count of 50 cells/mm3 to meet the listing. The commenters stated that they believe that children ages 5 to 18 should be able to use CD4 percentage in order to be consistent with the adult listing.

Response: We will not add a CD4 percentage that is equivalent to an absolute CD4 count of 50 cells/mm3 or less, because there is no precise correlation between the two measurements. With regard to the commenters' concerns about consistency between the adult and childhood listings involving CD4 measurements, we believe that the commenter may have misread the proposed rule. We note that the criterion based on absolute CD4 measurement alone for adults, like that for children from age 5 to the attainment of age 18, does not include a CD4 percentage. The IOM indicated to us that CD4 levels in children correspond with adult levels by the age of 5 and that absolute CD4 count is generally the preferred metric for these age groups. Therefore, we believe that it is appropriate for the criterion for children in this older age group to mirror that for adults and require this type of measurement.

Furthermore, 14.11G for adults, which was the only current or proposed adult criterion that includes CD4 percentage, requires a CD4 measurement (either absolute count or percentage) in conjunction with either a BMI measurement of less than 18.5 or a hemoglobin measurement of less than 8.0 grams per deciliter. The final rule for evaluating growth disorders and weight loss in children, published April 13, 2015, made changes to the immune system listings, which were not in the NPRM.7 Under current listing 114.08H for immune suppression and growth failure, we may find a child to be disabled based on a combination of CD4 measurement and growth failure (based on weight-for-length percentiles or body mass index (BMI), depending on age). For children age 5 to the attainment of age 18, the CD4 measurement may be an absolute count or a CD4 percentage. In this final rule, that listing will become 114.11I. Although 14.11G and 114.11I are not analogous (as we do not evaluate adults under listings related to growth impairments), we point this out to show the commenter that there are listings for both adults and children in which we consider CD4 percentages.

7 80 FR 19522.

Comment: Two commenters disagreed with our proposal to require a single CD4 measurement under proposed listings 14.11F and 14.11G. One commenter remarked that this proposal is different from other listings in which we require two measurements at least 60 days apart and is inconsistent with our durational requirements. The other commenter noted that “[a]dvances achieved with the availability of highly active antiretroviral therapy (HAART) have dramatically changed the prognosis and functional impact of HIV infection.” Two commenters expressed concerns about establishing a 12-month period of continuous disability based on one CD4 count alone, and one of the commenters suggested adding another CD4 count, hemoglobin level, or BMI assessment to the listing criteria.

One commenter also suggested that we provide specific guidance in relation to low CD4 counts for claimants who do not have access to medical care. The commenter noted that such claimants would be expected to have a more aggressive clinical course of infection. Three commenters stated that claimants may present for medical care with very low CD4 counts, at which point a diagnosis of HIV infection would be made and treatment initiated. With treatment, the claimant's CD4 count would be expected to rise due to the suppression of HIV infection.

Response: We have not adopted these comments. Anyone who meets the requirements in 14.11F or 14.11G occurring within the period that we are considering in connection with his or her application or continuing disability review, has an impairment of listing-level severity that will satisfy our duration requirement, whether or not he or she is receiving medical care. Even though a person's absolute CD4 count or percentage, BMI, or hemoglobin may increase with treatment, the person's immune deficiency will continue with an increased risk of morbidity and mortality for a continuous period of at least 12 months, which satisfies our duration requirement.

Comment: One commenter recommended that we explain in the introductory text that adjudicators can use the lowest values within the entire rating period for CD4 count and BMI or hemoglobin levels to evaluate an impairment. The commenter was concerned that adjudicators might misinterpret the listings to mean these findings must occur simultaneously.

Response: We adopted the comment by making changes to 14.00F5 to explain that the CD4 count and claimant BMI or hemoglobin levels evaluated under 14.11G do not have to be measured on the same date.

Comment: One commenter noted that proposed listings 14.11F and 14.11G use the lowest absolute CD4 count or CD4 percent as the basis for allowance. This commenter requested that we clarify the guidance in the proposed introductory text that these measurements “must occur within the period we are considering in connection with [the claimant's] application or continuing disability review.”

Response: We did not adopt this comment because it is already considered by our program rules. We are generally required to develop a complete medical history for at least 12 months preceding the month of the date of application. We will remind adjudicators about periods of consideration during our training on the HIV listings.

Comment: One commenter stated that “there are a number of HIV-infected individuals who have [a BMI of less than] 20 and are severely malnourished, but who fall short of the requirements under [proposed] 14.11G.” This commenter asked that we “consider adding a listing for [claimants] who have a BMI [greater than] 18.5 and [less than] 19, with a history of a documented current opportunistic infection and an absolute CD4 count of [less than] 200 in the [adjudicative timeframe].”

Response: We did not adopt the comment. The criteria in proposed 14.11G are appropriate for establishing listing-level severity when considering CD4 and BMI or hemoglobin measurements, as these data are highly predictive of an impairment that we consider disabling. We do not believe the findings proposed by the commenter will generally indicate an impairment that is severe enough to prevent an individual from doing any gainful activity. Moreover, we believe that the impact of adopting this comment would be negligible. Nevertheless, we may find that an individual who meets the criteria suggested by the commenter is disabled at steps 4 or 5 of our sequential evaluation process.

Comment: One commenter pointed out that after the publication of our NPRM, the Centers for Disease Control and Prevention (CDC) published a surveillance case definition that extended CD4 counts and percentages to children as well as adults and adolescents.8 This updated case definition “determines the stage of HIV infection in children age 6-12 years in the same way as adults and adolescents.” Additionally, the commenter stated that staging is primarily based on the CD4 count, which takes precedence over the CD4 percentages; the percentage is considered only if the count is missing. The commenter requested that we make conforming changes to all instances of the listings in which we refer to a CD4 count or percentage. The commenter also wished to note that the CD4 number is the most important measurement and that the CDC made changes for the percentage ranges for immunosuppression in all age groups.

Response: We did not adopt the comment. We use CD4 measurements for a different purpose than the CDC does in their surveillance case definition for HIV infection. The CDC provides surveillance case definitions only for public health surveillance purposes. We have provided CD4 counts in our listings to correspond to a specific level of impairment, which the CDC does not take into account in its surveillance case definitions. However, we have added CD4 counts in the final rule to HIV listings 114.11F1 for children from birth to attainment of age 1 and 114.11F2 for children from age 1 to attainment of age 5.

Comment: One commenter recommended that we “should not depend exclusively on CD4 count or [our] list of fatal or severely disabling HIV-related conditions” when determining eligibility for benefits.” The commenter noted that “some people that live with HIV/[acquired immunodeficiency syndrome] (AIDS) with CD4 counts above 50 are very ill and not able to seek gainful employment,” and asked that our “adjudicators take into account all fatal or very debilitating conditions when determining . . . eligibility for benefits.”

Response: Although we agree that we should not depend exclusively on CD4 count in order to determine eligibility for benefits, we did not make any changes to our listings and note that our regulations include criteria reaching beyond the stated value. At step 3 of our five-step disability determination process, we consider whether the claimant's impairment(s) meets (or medically equals) any of the listings. Many listing criteria do not require a specific diagnosis or laboratory level. For example, the criteria in 14.11I allow us to consider all manifestations of HIV infection that result in significant, documented signs and symptoms and marked limitation in function. If we do not find that a claimant is disabled at step 3, we must still consider whether he or she is disabled at steps 4 or 5 of our sequential evaluation process.9 We always consider all of a person's impairments when determining whether he or she is disabled, not just the impairments that are in our listings.

9 We evaluate disability differently for children under the age of 18. If we do not find that the child's impairment(s) meet or medically equal a medical listing at step 3, we will consider whether the impairment(s) functionally equal the listings. Steps 4 and 5 do not apply. 20 CFR 416.924, 416.926a.

Complications and Manifestations

Comment: Two commenters recommended that we clarify the difference between complications of HIV infection in proposed listing 14.11H, which is based on multiple hospitalizations, and manifestations of HIV infection in proposed listing 14.11I, which is based on functional limitations. We provide examples of complications of HIV infection in the introductory text at 14.00F6 and examples of manifestations of HIV infection in listing 14.11I itself. These commenters noted that some of the conditions given as examples of complications in 14.00F6 are not provided as examples of manifestations in 14.11I, and considered this to be confusing. One of the commenters believed that “any `complication' severe enough to result in hospitalization could also be severe enough to cause functional limitations and thus, should be referenced in the list of manifestations in 14.11I.”

Response: We agree with the commenters and have revised listing 14.11I so that the list of manifestations includes all examples of complications given in 14.00F6.

Comment: Three commenters suggested that we consider signs or symptoms of HIV infection and adverse effects of HIV treatment instead of solely considering repeated manifestations of HIV infection when considering an impairment under proposed listing 14.11I. One commenter provided specific text for a suggested edit to this proposed listing that reflected consideration of signs and symptoms of HIV infection as well as the adverse effects of HIV treatment. Another commenter noted that, in particular, symptoms of HIV infection that are not the direct result of a manifestation of HIV infection, such as fatigue, malaise, and pain, would not be considered under 14.11I.

Response: We did not adopt the comments. We require both repeated manifestations of HIV infection as well as a functional impairment in order to satisfy the criteria under 14.11I because both are necessary to reflect a level of impairment that indicates listing-level severity. If we find that a person's impairment does not meet listing 14.11I (or any of our listings), we will continue to apply the remaining steps in our sequential evaluation process to determine whether the person is disabled. In current 14.00G, which we did not propose to change and therefore did not include in the NPRM, we provide instructions on how we consider the effects of treatment, including adverse effects, in evaluating autoimmune disorders, immune deficiency disorders, or HIV infection. In current 14.00J, which we also did not propose to change and therefore did not include in the NPRM, we provide instructions on how we evaluate immune system disorders (including HIV infection) when it does not meet one of the listings. We apply these instructions when a person manifests signs or symptoms of HIV infection that are not specifically named in the HIV listings.

Comment: One commenter was critical of the proposed listings, stating they discriminate in favor of those with only severe manifestations of HIV. The commenter stated that “HIV infection can have a wide variety of manifestations such as diarrhea, fever, headache, thrush, skin rashes, weakness, weight loss, and dementia,” and “these problems can be compounded by the coexistence of a wide variety of heart, lung, orthopedic, mental and other disorders.” The commenter noted the proposed listings do not include most of these possible combinations, and felt the proposed listings discriminate against those with combinations of manifestations of HIV infection and other disorders.

Response: We did not make any changes in our final listings in response to these comments because we consider all of a claimant's impairments, related or unrelated to HIV infection, when determining whether a person is disabled.10 We explain in section 14.00I3 that adjudicators may consider multiple types of manifestations of HIV infection when determining whether a person's impairment meets listing 14.11I. While we do not consider impairments other than manifestations of HIV infection when evaluating whether a claimant's impairment meets listing 14.11I, the listings are only step 3 of our five step disability determination process. The purpose of these listings is to quickly identify impairments that we consider severe enough to prevent a person from doing any gainful activity, without the need to evaluate vocational factors. We may still find a person disabled later in our sequential evaluation process even if we find that his or her impairments do not meet or medically equal a listing.

10 We evaluate disability claims for children from birth to the attainment of age 18 differently. Steps 4 and 5 of the adult sequential evaluation process do not apply. After we consider whether the child's impairment(s) meets or medically equals a listing, we consider whether the child's impairment(s) functionally equal a listing.

Comment: One commenter requested that we add language to note that proposed listing 14.11I “does not contain an exhaustive list of conditions that may qualify under step 3 of the sequential evaluation process.”

Response: We adopted the comment and have added wording to clarify that the examples given in 14.11I are not an exhaustive list.

Comment: A number of commenters noted that HIV infection may also accelerate or interact with impairments in other body systems. One of these commenters stated that our proposed rule “does not account for those individuals whose HIV disease effectively accelerates the onset of conditions such as diabetes, heart disease, or kidney disease.” Two commenters asked that we include cardiovascular conditions in the list of manifestations of HIV infection in proposed 14.11I. These commenters cited the report on HIV and disability that we commissioned from the Institute of Medicine (IOM), which states “an increased risk for cardiovascular disease in HIV-infected populations as compared with HIV-negative populations has been well documented.” 11 These commenters noted that the IOM report states, “[cardiovascular disease] is also a leading cause of death in those infected with HIV, with an analysis of the Data Collection on Adverse Events of Anti-HIV Drugs Study finding that 11 percent of HIV-positive people die of a cardiovascular condition.” 12

11 Institute of Medicine. (2010). HIV and Disability: Updating the Social Security Listings. Washington, DC: The National Academies Press.

12Id.

Two other commenters recommended that we include a cross-reference to the cardiovascular listings to ensure that adjudicators “consider the impact and interplay of HIV infection and associated cardiovascular conditions.” These commenters also suggested that we should cross-reference hepatitis in the HIV listings.

Response: We agree with the comments and have added language to final 14.00J2 and 114.00J2 to note that HIV infection may affect the onset or course of, or treatment for, conditions in other body systems, such as cardiovascular disease and hepatitis. We have also revised 14.11I to provide examples of cardiovascular manifestations of HIV infection.

Comment: One commenter requested that we either eliminate our proposed criteria in 14.11H regarding duration and intervals between hospitalizations or add language that instructs adjudicators to defer to the treating physician with regard to the medical severity of the claimant's condition instead of relying on the hospitalization criteria for the listing. The commenter believes that we are incentivizing claimants to opt for longer hospital stays or abstain from treatment to prove the severity of their conditions and meet the listing criteria.

Response: We did not adopt the comment. In our experience, individuals do not opt for unwarranted hospital stays or forgo treatment in order to possibly qualify for disability benefits. The benefit of having a listing that captures more disabled individuals at step 3 of our sequential evaluation process outweighs the concern that particular claimants may attempt to lengthen hospital stays or abstain from treatment to meet the listing. We believe that a complication(s) of HIV infection that warrants three hospitalizations of 48 hours or longer, 30 days or more apart, within a 12 month period that we are considering in connection with an application or continuing disability review will prevent a person from engaging in any gainful activity and, therefore, represents listing-level severity. Moreover, we are able to evaluate complications of HIV infection resulting in fewer than three hospitalizations in a consecutive 12-month period using medical equivalence, the other listing criteria for adults, the functional equivalence rules for children, or at other steps in our sequential evaluation process. For example, the criteria in listing 14.11I evaluate the functional impact of the person's impairment in the broad areas of activities of daily living, social functioning, and concentration, persistence, or pace, including the functional impact of treatment such as repeated outpatient visits for complications.

Our medical equivalence rules permit us to find that a disorder is medically equivalent to a listing at step 3 if there are other findings related to the disorder that are at least of equal medical significance to the listing criteria (see §§ 404.1526 and 416.926). Although some of our listings include criteria for repeated hospitalizations (14.11H and 114.11G), our medical equivalence policy accommodates recent trends in clinical care that emphasize quality of, rather than quantity of, medical treatment.

The medical equivalence policy also accommodates claimants' varying level of access to medical care, the preference of some medical providers to reduce the use of emergency department and hospital-level medical interventions, and recent trends in clinical care that emphasize quality of, rather than quantity of, medical treatment. This accommodation accounts for differences in medical care people with similar disorders receive depending on the medical resources available to them. The medical equivalence policy provides some flexibility in determining whether a claimant is disabled at step 3 of the sequential evaluation process by allowing us to consider whether the claimant's impairment meets the listed criteria exactly or is at least equal in severity and duration to the criteria of any listed impairment.

If we are not able to find that a person's impairment due to HIV infection is disabling using our listings, we may still find the person disabled at the final steps of the sequential evaluation process.

Finally, the commenter's suggestion that we defer to the treating physician with regard to the medical severity of a person's condition in lieu of hospitalization frequency and duration in this listing means that we would be permitting the physician to determine whether the person is disabled. Under our rules, the finding of disability is an issue reserved to the Commissioner of Social Security.13

13 See 20 CFR 404.1527(c) and (d) and 416.927(c) and (d).

Comment: One commenter requested that we train adjudicators to evaluate repeated manifestations of HIV infection correctly. The commenter states that, under the current listings, they “rarely see adjudicators willing to approve claims of individuals with HIV based on repeated manifestations of [HIV infection].”

Response: We did not make any changes in our final listings as a result of this comment. We will provide training on the new listings, as we do for all listing updates. We will also conduct a study on the use of the listings after they have been in use for a year, as we do for all listing updates, and issue further training or policy guidance if needed.

Comment: One commenter recommended that the introductory text be improved by adding a more significant definition of multicentric Castleman disease (MCD), particularly how it is very similar to a lymphoma, although it is not actually a cancer.

Response: We adopted the comment and have provided expanded definitions for MCD in 14.00F3a and 114.00F3a.

Function

Comment: One commenter requested that we provide language to clarify that the examples in the introductory text of complications of HIV infection that may result in hospitalization are “not an all-inclusive or inflexible list.”

Response: We adopted this comment and have provided text in 14.00F6b and 114.00F5b to indicate that the examples in 14.00F6a and 114.00F5a are not an exhaustive list.

Comment: One commenter agreed with our revisions to section 14.00I5 of the introductory text to clarify our explanation of the term “marked,” but suggested that we construct “this change in a manner that facilitates a better process for determining the `severity' of the disability.”

Response: We did not adopt this comment. We provide guidance in current sections 14.00I5 through 14.00I8 that explains how we take into consideration a “marked” level of limitation in functioning to determine the severity of a person's impairment. This guidance is sufficient to allow adjudicators to evaluate the functional limitations resulting from HIV infection and other immune system disorders.

Comment: Two commenters asked that we “recognize the validity of an HIV treating physician's objective evaluation of a patient's HIV-related functional limitations.” They remarked, “HIV affects individuals differently according to physiological and biological factors unique to the individual,” and that “responses to treatment, including side effects, vary greatly according to sex, age and co-occurring conditions.” These commenters provided specific text that they wanted us to add to proposed listing 14.11I. The proposed text would instruct adjudicators to give special consideration to the opinion(s) of a claimant's primary care provider, in particular, an experienced HIV medical provider.

Response: We did not adopt the comment. When we evaluate medical opinions, such as those described by the commenters, we consider several factors. Those factors include the treating relationship between the opining medical source and the claimant, how much the medical source's treatment records support the medical opinion, and the consistency of the medical opinion with the other evidence throughout the record as a whole, including a claimant's self-reporting.14 This is true for all impairments across all body systems, not just in cases involving HIV infection.

14 See 20 CFR 404.1527(c) and 416.927(c).

Additionally, the finding about whether a claimant is or is not disabled is an issue reserved to the Commissioner. We do not give any special significance to the source of a statement on an issue reserved to the Commissioner, even if that source is a medical source who has treated the claimant.15

15 See 20 CFR 404.1527(d) and 416.927(d).

Comment: One commenter suggested that we expand the role of evidence of a claimant's functional limitations, as required under 14.11I, from sources other than those that we consider acceptable medical sources. The commenter urged us to “immediately adopt the IOM recommendation to expand acceptable medical sources to a wide array of licensed professionals and broaden the acceptable medical sources rule and guidance.”

Response: We did not adopt the comment because it is outside the scope of this rulemaking. However, under our rules, we may use evidence from sources other than acceptable medical sources in order to show the severity of a person's impairment and how that impairment affects the individual's ability to function.16 For example, we might request evidence from a social worker or another medical or professional source who has been treating a claimant, because this evidence can provide information about the claimant's functional capabilities. Other sources of evidence that we may consider include counselors, family members, caregivers, or neighbors.

16 See 20 CFR 404.1513(d) and 20.CFR 416.913(d).

Comment: One commenter disagreed with our proposal to remove diarrhea as a standalone listing (current listing 14.08I). The commenter stated that “diarrhea is a `manifestation' of HIV infection that does not result in a corresponding `sign or symptom', and, at [a] certain degree of severity, automatically results in a marked functional limitation.” The commenter suggested that we retain and revise the current standalone listing for diarrhea, and provided specific language for the revision.

Response: We did not adopt this comment. While we agree that diarrhea is a manifestation of HIV infection that may result in a marked functional limitation, we do not believe it is best evaluated under a standalone listing. We agree with the recommendation of the IOM that diarrhea should be evaluated using functional impairment criteria.17 We have specifically listed diarrhea as an example of a manifestation of HIV infection that may be evaluated under 14.11I.

17 Institute of Medicine. (2010). HIV and Disability: Updating the Social Security Listings. Washington, DC: The National Academies Press.

Comment: Two commenters requested that we revise proposed listing 14.11I for clarity, to include “neurocognitive or other mental limitations (including dementia, anxiety, depression, or other mental impairments not meeting the criteria in 12.02, 12.03, 12.04, or 12.06).”

Response: We did not add references to the specific mental disorders listings requested by the commenters, because doing so would appear to restrict the mental disorders we would consider under 14.11I to those specific conditions. Instead, we added language to 14.11I to clarify that we may consider any neurocognitive or other mental limitations not meeting the criteria in 12.00.

Comment: One commenter asked how we would implement the evaluation of a neurocognitive limitation under proposed 14.11I and whether its presence in a claim would necessitate review of the case by a psychological consultant.

Response: We did not make any changes in the final rule based on this comment. The need for a psychological consultant review depends on the facts in the individual case. The neurocognitive limitations provided as an example under listing 14.11I are considered a manifestation of HIV infection. We evaluate medical evidence based on the underlying disorder. If the level of limitation is such that we consider the neurocognitive limitation to be a mental impairment on its own, then a psychological consultant (or a medical consultant who is a psychiatrist) would review the case.

Specific Groups With HIV Infection

Comment: Numerous commenters disagreed with our proposal to remove the text in current section 14.00F4 about manifestations of HIV infection that are specific to women and requested that we restore this language in the final rule. The commenters were concerned that adjudicators who are unfamiliar with HIV infection may not immediately recognize that certain signs and symptoms are related to HIV infection in women. They believed that retaining the current language would help to instruct adjudicators to acknowledge and take these signs and symptoms into account as manifestations of HIV infection in women when making disability determinations.

Response: We adopted these comments and have placed this guidance in section 14.00F7 of the final rule. Additionally, we have added language to 14.11I specifically noting that certain gynecologic conditions may be manifestations of HIV infection.

Comment: One commenter recommended that we consider including the adolescent population more specifically in the listings. The commenter stated that youth ages 13 to 25 years “constitute the fastest growing and largest group of new HIV infections in the United States.” The commenter feels the listings “should take into account adolescents who are transitioning from the Part B listings for children to the Part A listings for adults so that HIV-infected youth are not lost to care.”

Response: We did not adopt this comment. The Part A and Part B listings for adults and children are very similar and closely parallel one another. In addition, under our rules, we may use the criteria in Part A when those criteria give appropriate consideration to the effects of the impairment(s) in children.18

18 See 20 CFR 404.1525(b)(2) and 20 CFR 416.925(b)(2)(i).

Other Body Systems

Comment: One commenter suggested that we remove the information in the proposed revisions to 5.00D4 of the introductory text about how comorbid disorders, such as HIV infection, may affect chronic viral hepatitis infections. The commenter stated that the language “does not provide meaningful guidance for the listings themselves.”

Response: We did not adopt the comment. We have based our final revisions on recommendations in the IOM report.19 These revisions also align with the requests of a number of commenters. In the introductory text, we include information that will be useful to our adjudicators when they evaluate impairments in a particular body system. Comorbid disorders, such as HIV infection, do have an impact on chronic viral hepatitis infections, and their presence can affect how we evaluate an impairment under the digestive body system.

19 Institute of Medicine. (2010). HIV and Disability: Updating the Social Security Listings. Washington, DC: The National Academies Press.

General Comments

Comment: Two commenters made suggestions regarding setting diaries for continuing disability review (CDR) under the HIV/AIDS listings. One commenter recommended that “individuals with HIV/AIDS associated malignancies have markedly improved survival rates,” and suggested that “these impairments should be assessed with the same three-year review diary as outlined for primary malignancies in the [cancer (malignant neoplastic)] listings.” The other commenter suggested that all HIV/AIDS listings should have a three-year review diary, with the decision to continue or cease benefits defined by the medical improvement review standard (the legal standard for determining whether disability continues in a CDR). The commenter noted “the specter and presence of an indicator disease no longer portends a poor prognosis,” and stated that “improvements in medical care, HAART, and improved survival rates support the need for [a CDR].”

Response: We did not adopt these comments. We do not specify a particular period of disability in the medical listings unless we can uniformly expect medical improvement for an impairment in a specific listing such that a person would no longer be disabled (for example, listing 6.04 for chronic kidney disease with kidney transplant). This is not the case for the impairments in the listings for HIV infection. We will address any new considerations for diary length and CDRs related to HIV infection in our internal policy guidance, as we normally do.

Comment: One commenter expressed concern that we do not provide quantitative data to show the validity of any of our proposed listings. The commenter stated that “hundreds of thousands of individuals engage in substantial gainful activity while meeting requirements of [other] listings,” such as hearing loss not treated with cochlear implantation. The commenter requested that we state the information and methods that we used to develop the listing criteria, and questioned whether it is “possible to evaluate a person's ability to engage in gainful activities using . . . the listings.”

Response: We did not make any changes in the final rule based on this comment. In the NPRM, we provided a list of specific references that we used to inform the changes that we proposed.20 In this final rule, we are making changes to the proposed rule based on comments that we received in response to the NPRM. The listings in this final rule represent impairments that we consider severe enough to prevent a person from engaging in any gainful activity.

20 79 FR 10730.

Comment: One commenter noted that medications for HIV infection affect people in different ways and may cause a person's other psychological and physical issues to worsen.

Response: We did not make any changes in the final rule based on this comment. We take the effects of treatment, including medications for HIV infection, into account when evaluating a case. This guidance is provided in section 14.00G of the introductory text, which was not shown in the NPRM because we did not propose to change it. Specifically, in 14.00G5, we explain how we evaluate the effects of treatment of HIV infection, including the effects of antiretroviral drugs, on the ability to function.

Comment: One commenter believed that the language in proposed listing 14.11I is unclear and discussed concerns with how we would apply the rule. The commenter requested that we clarify the listing by adding additional text noting that we consider more than repeated manifestations of HIV (for example, “significant, documented manifestations, symptoms, or signs”) under 14.11I and asks that we provide training to our adjudicators to properly consider these criteria.

Response: We did not make any changes in the final rule based on this comment. Our proposed language is clear and captures the intent of the listing. The changes that the commenter suggests would alter the meaning of the listing, not clarify it. We will address the concerns with the application of the rule in training for our adjudicators.

Comment: One commenter requested that we provide our disability examiners with more training in evaluating a claim involving HIV infection and applying the HIV infection listings.

Response: We did not make any changes in the final rule based on this comment. As we do with all updates to the listings, we will provide our disability examiners with training on the final rule for evaluating HIV infection.

Other Changes

In the NPRM, we proposed to remove listing 114.08L for evaluating functional limitations resulting from HIV infection in children. We explained that we were not including similar criteria in proposed listing 114.11 for HIV infection in children because of proposed changes in the mental disorders listings and because we may find children disabled under the Supplemental Security Income program based on functional equivalence to the listings.21 However, we did not propose to revise 114.00I, which notes the childhood listings that we use to evaluate functional limitations under the immune body system, to reflect the removal of 114.08L. After we published the NPRM, we published a final rule for evaluating mental disorders, which removed 114.08L as well as other childhood listing criteria that considered functional limitations under the immune disorders body system. In this final rule, we revised paragraph 114.00I to address how we will consider the impact of immune system disorders, including HIV, on a child's functioning.

21 See 20 CFR 416.924(d).

In order to provide consistent guidance, we are also making conforming changes to the listings for hematological disorders in 7.00A2 and 107.00A2 to explain that we will evaluate primary central nervous system lymphoma and primary effusion lymphoma associated with HIV infection under 14.11B, 14.11C, 114.11B, and 114.11C, respectively.

When will we begin to use this final rule?

We will begin to use this final rule on its effective date. We will continue to use the current listings until the date this final rule becomes effective. We will apply the final rule to new applications filed on or after the effective date of this final rule and to claims that are pending on or after the effective date.22

22 This means that we will use this final rule on and after their effective date, in any case in which we make a determination or decision. We expect that Federal courts will review our final decisions using the rules that were in effect at the time we issued the decisions. If a court reverses our final decision and remands a case for further administrative proceedings after the effective date of this final rule, we will apply this final rule to the entire period at issue in the decision we make after the court's remand.

How long will this final rule be in effect?

This final rule will remain in effect for 3 years after the date it becomes effective, unless we extend the expiration date. We will continue to monitor the rule and may revise it, as needed, before the end of the 3-year period.

What is our authority to make rules and set procedures for determining whether a person is disabled under the statutory definition?

Under the Act, we have full power and authority to make rules and regulations and to establish necessary and appropriate procedures to carry out such provisions. Sections 205(a), 702(a)(5), and 1631(d)(1).

Regulatory ProceduresExecutive Order 12866, as Supplemented by Executive Order 13563

We consulted with the Office of Management and Budget (OMB) and determined that this final rule meets the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Therefore, OMB reviewed it.

Regulatory Flexibility Act

We certify that this final rule will not have a significant economic impact on a substantial number of small entities because it affects individuals only. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

Paperwork Reduction Act

These Final Rules do not create any new or affect any existing collections, and therefore, do not require OMB approval under the Paperwork Reduction Act.

For the reasons set out in the preamble, we are amending 20 CFR part 404 subpart P as set forth below:

PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-)Subpart P—Determining Disability and Blindness1. The authority citation for subpart P of part 404 continues to read as follows:Authority:

2. Amend appendix 1 to subpart P of part 404 by:a. Revising item 15 of the introductory text before part A;b. Revising the last sentence of paragraph 5.00D4a(i) of part A;c. Revising paragraph 5.00D4b of part A;d. Revising paragraph 7.00A2 of part A;e. Revising the last sentence of paragraph 8.00D3 of part A;f. Revising paragraph 13.00A of part A;g. Revising paragraphs 14.00A4, 14.00F, and 14.00I1 of part A;h. Revising the first two sentences of paragraph 14.00I5 of part A;i. Removing the first three sentences of paragraph 14.00J2 of part A and adding two sentences in their place;j. Removing and reserving listing 14.08 of part A;k. Adding listing 14.11 to part A;l. Revising the last sentence of paragraph 105.00D4a(i) of part B;m. Revising paragraph 105.00D4b of part B;n. Revising paragraph 107.00A2 of part B;o. Revising the last sentence of paragraph 108.00D3 of part B;p. Revising paragraph 113.00A of part B;q. Revising paragraphs 114.00A4, 114.00F, and 114.00I of part B;r. Removing the first two sentences of 114.00J2 of part B and adding three sentences in their place;s. Removing and reserving listing 114.08 of part B; andt. Adding listing 114.11 to part B.

The revisions and additions read as follows:

Appendix 1 to Subpart P of Part 404—Listing of Impairments

15. Immune System Disorders (14.00 and 114.00): January 17, 2020.

Part A5.00 Digestive System

D. * * *

4. * * *

a. * * *

(i) * * * Comorbid disorders, such as HIV infection, may accelerate the clinical course of viral hepatitis infection(s) or may result in a poorer response to medical treatment.

b. Chronic hepatitis B virus (HBV) infection.

(i) Chronic HBV infection can be diagnosed by the detection of hepatitis B surface antigen (HBsAg) or hepatitis B virus DNA (HBV DNA) in the blood for at least 6 months. In addition, detection of the hepatitis B e antigen (HBeAg) suggests an increased likelihood of progression to cirrhosis, ESLD, and hepatocellular carcinoma. (HBeAg may also be referred to as “hepatitis B early antigen” or “hepatitis B envelope antigen.”)

(ii) The therapeutic goal of treatment is to suppress HBV replication and thereby prevent progression to cirrhosis, ESLD, and hepatocellular carcinoma. Treatment usually includes interferon injections, oral antiviral agents, or a combination of both. Common adverse effects of treatment are the same as noted in 5.00D4c(ii) for HCV, and generally end within a few days after treatment is discontinued.

7.00 Hematological Disorders

A. * * *

2. We evaluate malignant (cancerous) hematological disorders, such as lymphoma, leukemia, and multiple myeloma, under the appropriate listings in 13.00, except for two lymphomas associated with human immunodeficiency virus (HIV) infection. We evaluate primary central nervous system lymphoma associated with HIV infection under 14.11B, and primary effusion lymphoma associated with HIV infection under 14.11C.

A. What impairments do these listings cover? We use these listings to evaluate all cancers (malignant neoplastic diseases) except certain cancers associated with human immunodeficiency virus (HIV) infection. We use the criteria in 14.11B to evaluate primary central nervous system lymphoma, 14.11C to evaluate primary effusion lymphoma, and 14.11E to evaluate pulmonary Kaposi sarcoma if you also have HIV infection. We evaluate all other cancers associated with HIV infection, for example, Hodgkin lymphoma or non-pulmonary Kaposi sarcoma, under this body system or under 14.11F-I in the immune system disorders body system.

14.00 Immune System Disorders

A. * * *

4. Human immunodeficiency virus (HIV) infection (14.00F). HIV infection may be characterized by increased susceptibility to common infections as well as opportunistic infections, cancers, or other conditions listed in 14.11.

F. How do we document and evaluate HIV infection? Any individual with HIV infection, including one with a diagnosis of acquired immune deficiency syndrome (AIDS), may be found disabled under 14.11 if his or her impairment meets the criteria in that listing or is medically equivalent to the criteria in that listing.

1. Documentation of HIV infection.

a. Definitive documentation of HIV infection. We may document a diagnosis of HIV infection by positive findings on one or more of the following definitive laboratory tests:

(i) HIV antibody screening test (for example, enzyme immunoassay, or EIA), confirmed by a supplemental HIV antibody test such as the Western blot (immunoblot), an immunofluorescence assay, or an HIV-1/HIV-2 antibody differentiation immunoassay.

(v) Other tests that are highly specific for detection of HIV and that are consistent with the prevailing state of medical knowledge.

b. We will make every reasonable effort to obtain the results of your laboratory testing. Pursuant to §§ 404.1519f and 416.919f of this chapter, we will purchase examinations or tests necessary to make a determination in your claim if no other acceptable documentation exists.

c. Other acceptable documentation of HIV infection. We may also document HIV infection without definitive laboratory evidence.

(i) We will accept a persuasive report from a physician that a positive diagnosis of your HIV infection was confirmed by an appropriate laboratory test(s), such as those described in 14.00F1a. To be persuasive, this report must state that you had the appropriate definitive laboratory test(s) for diagnosing your HIV infection and provide the results. The report must also be consistent with the remaining evidence of record.

(ii) We may also document HIV infection by the medical history, clinical and laboratory findings, and diagnosis(es) indicated in the medical evidence, provided that such documentation is consistent with the prevailing state of medical knowledge and clinical practice and is consistent with the other evidence in your case record. For example, we will accept a diagnosis of HIV infection without definitive laboratory evidence of the HIV infection if you have an opportunistic disease that is predictive of a defect in cell-mediated immunity (for example, toxoplasmosis of the brain or Pneumocystis pneumonia (PCP)), and there is no other known cause of diminished resistance to that disease (for example, long-term steroid treatment or lymphoma). In such cases, we will make every reasonable effort to obtain full details of the history, medical findings, and results of testing.

2. Documentation of the manifestations of HIV infection.

a. Definitive documentation of manifestations of HIV infection. We may document manifestations of HIV infection by positive findings on definitive laboratory tests, such as culture, microscopic examination of biopsied tissue or other material (for example, bronchial washings), serologic tests, or on other generally acceptable definitive tests consistent with the prevailing state of medical knowledge and clinical practice.

b. We will make every reasonable effort to obtain the results of your laboratory testing. Pursuant to §§ 404.1519f and 416.919f of this chapter, we will purchase examinations or tests necessary to make a determination of your claim if no other acceptable documentation exists.

c. Other acceptable documentation of manifestations of HIV infection. We may also document manifestations of HIV infection without definitive laboratory evidence.

(i) We will accept a persuasive report from a physician that a positive diagnosis of your manifestation of HIV infection was confirmed by an appropriate laboratory test(s). To be persuasive, this report must state that you had the appropriate definitive laboratory test(s) for diagnosing your manifestation of HIV infection and provide the results. The report must also be consistent with the remaining evidence of record.

(ii) We may also document manifestations of HIV infection without the definitive laboratory evidence described in 14.00F2a, provided that such documentation is consistent with the prevailing state of medical knowledge and clinical practice and is consistent with the other evidence in your case record. For example, many conditions are now commonly diagnosed based on some or all of the following: Medical history, clinical manifestations, laboratory findings (including appropriate medically acceptable imaging), and treatment responses. In such cases, we will make every reasonable effort to obtain full details of the history, medical findings, and results of testing.

3. Disorders associated with HIV infection (14.11A-E).

a. Multicentric Castleman disease (MCD, 14.11A) affects multiple groups of lymph nodes and organs containing lymphoid tissue. This widespread involvement distinguishes MCD from localized (or unicentric) Castleman disease, which affects only a single set of lymph nodes. While not a cancer, MCD is known as a lymphoproliferative disorder. Its clinical presentation and progression is similar to that of lymphoma, and its treatment may include radiation or chemotherapy. We require characteristic findings on microscopic examination of the biopsied lymph nodes or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis. Localized (or unicentric) Castleman disease does not meet or medically equal the criterion in 14.11A, but we may evaluate it under the criteria in 14.11H or 14.11I.

b. Primary central nervous system lymphoma (PCNSL, 14.11B) originates in the brain, spinal cord, meninges, or eye. Imaging tests (for example, MRI) of the brain, while not diagnostic, may show a single lesion or multiple lesions in the white matter of the brain. We require characteristic findings on microscopic examination of the cerebral spinal fluid or of the biopsied brain tissue, or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

c. Primary effusion lymphoma (PEL, 14.11C) is also known as body cavity lymphoma. We require characteristic findings on microscopic examination of the effusion fluid or of the biopsied tissue from the affected internal organ, or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

d. Progressive multifocal leukoencephalopathy (PML, 14.11D) is a progressive neurological degenerative syndrome caused by the John Cunningham (JC) virus in immunosuppressed individuals. Clinical findings of PML include clumsiness, progressive weakness, and visual and speech changes. Personality and cognitive changes may also occur. We require appropriate clinical findings, characteristic white matter lesions on MRI, and a positive PCR test for the JC virus in the cerebrospinal fluid to establish the diagnosis. We also accept a positive brain biopsy for JC virus or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

e. Pulmonary Kaposi sarcoma (Kaposi sarcoma in the lung, 14.11E) is the most serious form of Kaposi sarcoma (KS). Other internal KS tumors (for example, tumors of the gastrointestinal tract) have a more variable prognosis. We require characteristic findings on microscopic examination of the induced sputum, bronchoalveolar lavage washings, or of the biopsied transbronchial tissue, or by other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

4. CD4 measurement (14.11F). To evaluate your HIV infection under 14.11F, we require one measurement of your absolute CD4 count (also known as CD4 count or CD4+ T-helper lymphocyte count). This measurement must occur within the period we are considering in connection with your application or continuing disability review. If you have more than one measurement of your absolute CD4 count within this period, we will use your lowest absolute CD4 count.

5. Measurement of CD4 and either body mass index or hemoglobin (14.11G). To evaluate your HIV infection under 14.11G, we require one measurement of your absolute CD4 count or your CD4 percentage, and either a measurement of your body mass index (BMI) or your hemoglobin. These measurements must occur within the period we are considering in connection with your application or continuing disability review. If you have more than one measurement of your CD4 (absolute count or percentage), BMI, or hemoglobin within this period, we will use the lowest of your CD4 (absolute count or percentage), BMI, or hemoglobin. The date of your lowest CD4 (absolute count or percentage) measurement may be different from the date of your lowest BMI or hemoglobin measurement. We calculate your BMI using the formulas in 5.00G2.

6. Complications of HIV infection requiring hospitalization (14.11H).

a. Complications of HIV infection may include infections (common or opportunistic), cancers, and other conditions. Examples of complications that may result in hospitalization include: Depression; diarrhea; immune reconstitution inflammatory syndrome; malnutrition; and PCP and other severe infections.

b. Under 14.11H, we require three hospitalizations within a 12-month period that are at least 30 days apart and that result from a complication(s) of HIV infection. The hospitalizations may be for the same complication or different complications of HIV infection and are not limited to the examples of complications that may result in hospitalization listed in 14.00F6a. All three hospitalizations must occur within the period we are considering in connection with your application or continuing disability review. Each hospitalization must last at least 48 hours, including hours in a hospital emergency department immediately before the hospitalization.

c. We will use the rules on medical equivalence in §§ 404.1526 and 416.926 of this chapter to evaluate your HIV infection if you have fewer, but longer, hospitalizations, or more frequent, but shorter, hospitalizations, or if you receive nursing, rehabilitation, or other care in alternative settings.

7. HIV infection manifestations specific to women.

a. General. Most women with severe immunosuppression secondary to HIV infection exhibit the typical opportunistic infections and other conditions, such as PCP, Candida esophagitis, wasting syndrome, cryptococcosis, and toxoplasmosis. However, HIV infection may have different manifestations in women than in men. Adjudicators must carefully scrutinize the medical evidence and be alert to the variety of medical conditions specific to, or common in, women with HIV infection that may affect their ability to function in the workplace.

b. Additional considerations for evaluating HIV infection in women. Many of these manifestations (for example, vulvovaginal candidiasis or pelvic inflammatory disease) occur in women with or without HIV infection, but can be more severe or resistant to treatment, or occur more frequently in a woman whose immune system is suppressed. Therefore, when evaluating the claim of a woman with HIV infection, it is important to consider gynecologic and other problems specific to women, including any associated symptoms (for example, pelvic pain), in assessing the severity of the impairment and resulting functional limitations. We may evaluate manifestations of HIV infection in women under 14.11H-I, or under the criteria for the appropriate body system (for example, cervical cancer under 13.23).

8. HIV-associated dementia (HAD). HAD is an advanced neurocognitive disorder, characterized by a significant decline in cognitive functioning. We evaluate HAD under 14.11I. Other names associated with neurocognitive disorders due to HIV infection include: AIDS dementia complex, HIV dementia, HIV encephalopathy, and major neurocognitive disorder due to HIV infection.

I. How do we use the functional criteria in these listings?

1. The following listings in this body system include standards for evaluating the functional limitations resulting from immune system disorders: 14.02B, for systemic lupus erythematosus; 14.03B, for systemic vasculitis; 14.04D, for systemic sclerosis (scleroderma); 14.05E, for polymyositis and dermatomyositis; 14.06B, for undifferentiated and mixed connective tissue disease; 14.07C, for immune deficiency disorders, excluding HIV infection; 14.09D, for inflammatory arthritis; 14.10B, for Sjögren's syndrome; and 14.11I, for HIV infection.

5. Marked limitation means that the signs and symptoms of your immune system disorder interfere seriously with your ability to function. Although we do not require the use of such a scale, “marked” would be the fourth point on a five-point scale consisting of no limitation, mild limitation, moderate limitation, marked limitation, and extreme limitation. * * *

J. * * *

2. Individuals with immune system disorders, including HIV infection, may manifest signs or symptoms of a mental impairment or of another physical impairment. For example, HIV infection may accelerate the onset of conditions such as diabetes or affect the course of or treatment options for diseases such as cardiovascular disease or hepatitis. We may evaluate these impairments under the affected body system. * * *

14.08 [Reserved]

14.11 Human immunodeficiency virus (HIV) infection. With documentation as described in 14.00F1 and one of the following:

G. Absolute CD4 count of less than 200 cells/mm3 or CD4 percentage of less than 14 percent, and one of the following (values do not have to be measured on the same date) (see 14.00F5):

1. BMI measurement of less than 18.5; or

2. Hemoglobin measurement of less than 8.0 grams per deciliter (g/dL).

OR

H. Complication(s) of HIV infection requiring at least three hospitalizations within a 12-month period and at least 30 days apart (see 14.00F6). Each hospitalization must last at least 48 hours, including hours in a hospital emergency department immediately before the hospitalization.

3. Limitation in completing tasks in a timely manner due to deficiencies in concentration, persistence, or pace.

Part B105.00 Digestive System

D. * * *

4. * * *

a. * * *

(i) * * * Comorbid disorders, such as HIV infection, may accelerate the clinical course of viral hepatitis infection(s) or may result in a poorer response to medical treatment.

b. Chronic hepatitis B virus (HBV) infection.

(i) Chronic HBV infection can be diagnosed by the detection of hepatitis B surface antigen (HBsAg) or hepatitis B virus DNA (HBV DNA) in the blood for at least 6 months. In addition, detection of the hepatitis B e antigen (HBeAg) suggests an increased likelihood of progression to cirrhosis, ESLD, and hepatocellular carcinoma. (HBeAg may also be referred to as “hepatitis B early antigen” or “hepatitis B envelope antigen.”)

(ii) The therapeutic goal of treatment is to suppress HBV replication and thereby prevent progression to cirrhosis, ESLD, and hepatocellular carcinoma. Treatment usually includes interferon injections, oral antiviral agents, or a combination of both. Common adverse effects of treatment are the same as noted in 105.00D4c(ii) for HCV, and generally end within a few days after treatment is discontinued.

107.00 Hematological Disorders

A. * * *

2. We evaluate malignant (cancerous) hematological disorders, such as lymphoma, leukemia, and multiple myeloma, under the appropriate listings in 113.00, except for two lymphomas associated with human immunodeficiency virus (HIV) infection. We evaluate primary central nervous system lymphoma associated with HIV infection under 114.11B, and primary effusion lymphoma associated with HIV infection under 114.11C.

A. What impairments do these listings cover? We use these listings to evaluate all cancers (malignant neoplastic diseases) except certain cancers associated with human immunodeficiency virus (HIV) infection. We use the criteria in 114.11B to evaluate primary central nervous system lymphoma, 114.11C to evaluate primary effusion lymphoma, and 114.11E to evaluate pulmonary Kaposi sarcoma if you also have HIV infection. We evaluate all other cancers associated with HIV infection, for example, Hodgkin lymphoma or non-pulmonary Kaposi sarcoma, under this body system or under 114.11F-I in the immune system disorders body system.

114.00 Immune System Disorders

A. * * *

4. Human immunodeficiency virus (HIV) infection (114.00F). HIV infection may be characterized by increased susceptibility to common infections as well as opportunistic infections, cancers, or other conditions listed in 114.11.

F. How do we document and evaluate HIV infection? Any child with HIV infection, including one with a diagnosis of acquired immune deficiency syndrome (AIDS), may be found disabled under 114.11 if his or her impairment meets the criteria in that listing or is medically equivalent to the criteria in that listing.

1. Documentation of HIV infection.

a. Definitive documentation of HIV infection. We may document a diagnosis of HIV infection by positive findings on one or more of the following definitive laboratory tests:

(i) HIV antibody screening test (for example, enzyme immunoassay, or EIA), confirmed by a supplemental HIV antibody test such as the Western blot (immunoblot) or immunofluorescence assay, for any child age 18 months or older.

(v) Other tests that are highly specific for detection of HIV and that are consistent with the prevailing state of medical knowledge.

b. We will make every reasonable effort to obtain the results of your laboratory testing. Pursuant to § 416.919f of this chapter, we will purchase examinations or tests necessary to make a determination in your claim if no other acceptable documentation exists.

c. Other acceptable documentation of HIV infection. We may also document HIV infection without definitive laboratory evidence.

(i) We will accept a persuasive report from a physician that a positive diagnosis of your HIV infection was confirmed by an appropriate laboratory test(s), such as those described in 114.00F1a. To be persuasive, this report must state that you had the appropriate definitive laboratory test(s) for diagnosing your HIV infection and provide the results. The report must also be consistent with the remaining evidence of record.

(ii) We may also document HIV infection by the medical history, clinical and laboratory findings, and diagnosis(es) indicated in the medical evidence, provided that such documentation is consistent with the prevailing state of medical knowledge and clinical practice and is consistent with the other evidence in your case record. For example, we will accept a diagnosis of HIV infection without definitive laboratory evidence of the HIV infection if you have an opportunistic disease that is predictive of a defect in cell-mediated immunity (for example, toxoplasmosis of the brain or Pneumocystis pneumonia (PCP)), and there is no other known cause of diminished resistance to that disease (for example, long-term steroid treatment or lymphoma). In such cases, we will make every reasonable effort to obtain full details of the history, medical findings, and results of testing.

2. Documentation of the manifestations of HIV infection.

a. Definitive documentation of manifestations of HIV infection. We may document manifestations of HIV infection by positive findings on definitive laboratory tests, such as culture, microscopic examination of biopsied tissue or other material (for example, bronchial washings), serologic tests, or on other generally acceptable definitive tests consistent with the prevailing state of medical knowledge and clinical practice.

b. We will make every reasonable effort to obtain the results of your laboratory testing. Pursuant to § 416.919f of this chapter, we will purchase examinations or tests necessary to make a determination of your claim if no other acceptable documentation exists.

c. Other acceptable documentation of manifestations of HIV infection. We may also document manifestations of HIV infection without definitive laboratory evidence.

(i) We will accept a persuasive report from a physician that a positive diagnosis of your manifestation of HIV infection was confirmed by an appropriate laboratory test(s). To be persuasive, this report must state that you had the appropriate definitive laboratory test(s) for diagnosing your manifestation of HIV infection and provide the results. The report must also be consistent with the remaining evidence of record.

(ii) We may also document manifestations of HIV infection without the definitive laboratory evidence described in 114.00F2a, provided that such documentation is consistent with the prevailing state of medical knowledge and clinical practice and is consistent with the other evidence in your case record. For example, many conditions are now commonly diagnosed based on some or all of the following: Medical history, clinical manifestations, laboratory findings (including appropriate medically acceptable imaging), and treatment responses. In such cases, we will make every reasonable effort to obtain full details of the history, medical findings, and results of testing.

3. Disorders associated with HIV infection (114.11A-E).

a. Multicentric Castleman disease (MCD, 114.11A) affects multiple groups of lymph nodes and organs containing lymphoid tissue. This widespread involvement distinguishes MCD from localized (or unicentric) Castleman disease, which affects only a single set of lymph nodes. While not a cancer, MCD is known as a lymphoproliferative disorder. Its clinical presentation and progression is similar to that of lymphoma, and its treatment may include radiation or chemotherapy. We require characteristic findings on microscopic examination of the biopsied lymph nodes or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis. Localized (or unicentric) Castleman disease does not meet or medically equal the criterion in 114.11A, but we may evaluate it under the criteria in 114.11G or 14.11I in part A.

b. Primary central nervous system lymphoma (PCNSL, 114.11B) originates in the brain, spinal cord, meninges, or eye. Imaging tests (for example, MRI) of the brain, while not diagnostic, may show a single lesion or multiple lesions in the white matter of the brain. We require characteristic findings on microscopic examination of the cerebral spinal fluid or of the biopsied brain tissue, or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

c. Primary effusion lymphoma (PEL, 114.11C) is also known as body cavity lymphoma. We require characteristic findings on microscopic examination of the effusion fluid or of the biopsied tissue from the affected internal organ, or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

d. Progressive multifocal leukoencephalopathy (PML, 114.11D) is a progressive neurological degenerative syndrome caused by the John Cunningham (JC) virus in immunosuppressed children. Clinical findings of PML include clumsiness, progressive weakness, and visual and speech changes. Personality and cognitive changes may also occur. We require appropriate clinical findings, characteristic white matter lesions on MRI, and a positive PCR test for the JC virus in the cerebrospinal fluid to establish the diagnosis. We also accept a positive brain biopsy for JC virus or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

e. Pulmonary Kaposi sarcoma (Kaposi sarcoma in the lung, 114.11E) is the most serious form of Kaposi sarcoma (KS). Other internal KS tumors (for example, tumors of the gastrointestinal tract) have a more variable prognosis. We require characteristic findings on microscopic examination of the induced sputum, bronchoalveolar lavage washings, or of the biopsied transbronchial tissue, or other generally acceptable methods consistent with the prevailing state of medical knowledge and clinical practice to establish the diagnosis.

4. CD4 measurement (114.11F). To evaluate your HIV infection under 114.11F, we require one measurement of your absolute CD4 count (also known as CD4 count or CD4+ T-helper lymphocyte count) or CD4 percentage for children from birth to attainment of age 5, or one measurement of your absolute CD4 count for children from age 5 to attainment of age 18. These measurements (absolute CD4 count or CD4 percentage) must occur within the period we are considering in connection with your application or continuing disability review. If you have more than one CD4 measurement within this period, we will use your lowest absolute CD4 count or your lowest CD4 percentage.

a. Complications of HIV infection may include infections (common or opportunistic), cancers, and other conditions. Examples of complications that may result in hospitalization include: Depression; diarrhea; immune reconstitution inflammatory syndrome; malnutrition; and PCP and other severe infections.

b. Under 114.11G, we require three hospitalizations within a 12-month period that are at least 30 days apart and that result from a complication(s) of HIV infection. The hospitalizations may be for the same complication or different complications of HIV infection and are not limited to the examples of complications that may result in hospitalization listed in 114.00F5a. All three hospitalizations must occur within the period we are considering in connection with your application or continuing disability review. Each hospitalization must last at least 48 hours, including hours in a hospital emergency department immediately before the hospitalization.

c. We will use the rules on medical equivalence in § 416.926 of this chapter to evaluate your HIV infection if you have fewer, but longer, hospitalizations, or more frequent, but shorter, hospitalizations, or if you receive nursing, rehabilitation, or other care in alternative settings.

6. Neurological manifestations specific to children (114.11H). The methods of identifying and evaluating neurological manifestations may vary depending on a child's age. For example, in an infant, impaired brain growth can be documented by a decrease in the growth rate of the head. In an older child, impaired brain growth may be documented by brain atrophy on a CT scan or MRI. Neurological manifestations may present in the loss of acquired developmental milestones (developmental regression) in infants and young children or, in the loss of acquired intellectual abilities in school-age children and adolescents. A child may demonstrate loss of intellectual abilities by a decrease in IQ scores, by forgetting information previously learned, by inability to learn new information, or by a sudden onset of a new learning disability. When infants and young children present with serious developmental delays (without regression), we evaluate the child's impairment(s) under 112.00.

7. Growth failure due to HIV immune suppression (114.11I).

a. To evaluate growth failure due to HIV immune suppression, we require documentation of the laboratory values described in 114.11I1 and the growth measurements in 114.11I2 or 114.11I3 within the same consecutive 12-month period. The dates of laboratory findings may be different from the dates of growth measurements.

b. Under 114.11I2 and 114.11I3, we use the appropriate table under 105.08B in the digestive system to determine whether a child's growth is less than the third percentile.

(i) For children from birth to attainment of age 2, we use the weight-for-length table corresponding to the child's gender (Table I or Table II).

(ii) For children from age 2 to attainment of age 18, we use the body mass index (BMI)-for-age corresponding to the child's gender (Table III or Table IV).

(iii) BMI is the ratio of a child's weight to the square of his or her height. We calculate BMI using the formulas in 105.00G2c.

I. How do we consider the impact of your immune system disorder on your functioning?

1. We will consider all relevant information in your case record to determine the full impact of your immune system disorder, including HIV infection, on your ability to function. Functional limitation may result from the impact of the disease process itself on your mental functioning, physical functioning, or both your mental and physical functioning. This could result from persistent or intermittent symptoms, such as depression, diarrhea, severe fatigue, or pain, resulting in a limitation of your ability to acquire information, to concentrate, to persevere at a task, to interact with others, to move about, or to cope with stress. You may also have limitations because of your treatment and its side effects (see 114.00G).

2. Important factors we will consider when we evaluate your functioning include, but are not limited to: Your symptoms (see 114.00H), the frequency and duration of manifestations of your immune system disorder, periods of exacerbation and remission, and the functional impact of your treatment, including the side effects of your medication (see 114.00G). See §§ 416.924a and 416.926a of this chapter for additional guidance on the factors we consider when we evaluate your functioning.

3. We will use the rules in §§ 416.924a and 416.926a of this chapter to evaluate your functional limitations and determine whether your impairment functionally equals the listings.

J. * * *

2. Children with immune system disorders, including HIV infection, may manifest signs or symptoms of a mental impairment or of another physical impairment. For example, HIV infection may accelerate the onset of conditions such as diabetes or affect the course of or treatment options for diseases such as cardiovascular disease or hepatitis. We may evaluate these impairments under the affected body system. * * *

114.08 [Reserved]

114.11 Human immunodeficiency virus (HIV) infection. With documentation as described in 114.00F1 and one of the following:

1. For children from birth to attainment of age 1, absolute CD4 count of 500 cells/mm3 or less, or CD4 percentage of less than 15 percent; or

2. For children from age 1 to attainment of age 5, absolute CD4 count of 200 cells/mm3 or less, or CD4 percentage of less than 15 percent; or

3. For children from age 5 to attainment of age 18, absolute CD4 count of 50 cells/mm3 or less.

OR

G. Complication(s) of HIV infection requiring at least three hospitalizations within a 12-month period and at least 30 days apart (see 114.00F5). Each hospitalization must last at least 48 hours, including hours in a hospital emergency department immediately before the hospitalization.

OR

H. A neurological manifestation of HIV infection (for example, HIV encephalopathy or peripheral neuropathy) (see 114.00F6) resulting in one of the following:

1. Loss of previously acquired developmental milestones or intellectual ability (including the sudden onset of a new learning disability), documented on two examinations at least 60 days apart; or

2. Progressive motor dysfunction affecting gait and station or fine and gross motor skills, documented on two examinations at least 60 days apart; or

3. Microcephaly with head circumference that is less than the third percentile for age, documented on two examinations at least 60 days apart; or

We published a document in the Federal Register revising our rules on September 26, 2016. That document inadvertently included incorrect amendatory instructions to appendix 1 to subpart P of 20 CFR part 404, removing section 114.00I and redesignating section 114.00J as section 114.00I. This document corrects the final regulation by removing that amendatory instruction.

We published a final rule in the Federal Register of September 26, 2016 (81 FR 66137) titled, Revised Medical Criteria for Evaluating Mental Disorders. The final rule, among other things, amended 20 CFR part 404. We inadvertently included an amendatory instruction to appendix 1 to subpart P of 20 CFR part 404, removing section 114.00I and redesignating section 114.00J as section 114.00I. This document amends and corrects the final regulation.

Section 1303 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) authorizes the use of the Construction Manager/General Contractor (CM/GC) contracting method. This final rule implements the new provisions in the statute, including requirements for FHWA approvals relating to the CM/GC method of contracting for projects receiving Federal-aid Highway Program funding.

This document, the notice of proposed rulemaking (NPRM), and all comments received may be viewed online through the Federal eRulemaking portal at: http://www.regulations.gov. The Web site is available 24 hours each day, 365 days each year. Please follow the instructions. An electronic copy of this document may also be downloaded by accessing the Office of the Federal Register's home page at: http://www.archives.gov/federal-register/, or the Government Publishing Office's Web page at: http://www.gpo.gov/fdsys.

Executive Summary

This regulatory action fulfills the statutory requirement in section 1303(b) of MAP-21 requiring the Secretary to promulgate a regulation to implement the CM/GC method of contracting. The CM/GC contracting method allows a contracting agency to use a single procurement to secure pre-construction and construction services. In the pre-construction services phase, a contracting agency procures the services of a construction contractor early in the design phase of a project in order to obtain the contractor's input on constructability issues that may be affected by the project design. If the contracting agency and the construction contractor reach agreement on price reasonableness, they enter into a contract for the construction of the project.

The CM/GC method has proven to be an effective method of project delivery through its limited deployment in the FHWA's Special Experimental Project Number 14 (SEP-14) Program. Utilizing the contractor's unique construction expertise in the design phase can recommend for the contracting agency's consideration innovative methods and industry best practices to accelerate project delivery and offer reduced costs and reduced schedule risks.

Background

Section 1303 of MAP-21 amended 23 U.S.C. 112(b) by adding paragraph (4) to authorize the use of the CM/GC method of contracting. While the term CM/GC is not used in Section 1303 of MAP-21 to describe the contracting method, the statute allows contracting agencies to award a two-phase contract to a “construction manager or general contractor” for the provision of construction-related services during both the preconstruction and construction phases of a project. State statutes authorizing this method of contracting use different titles including: CM/GC, Construction Manager at-Risk, and General Contractor/Construction Manager. The FHWA has elected to use the term “construction manager/general contractor,” or “CM/GC,” in reference to two-phase contracts that provide for constructability input in the preconstruction phase followed by the construction phase of a project.

The CM/GC contracting method allows a contracting agency to receive a contractor's constructability recommendations during the design process. A number of States including Utah, Colorado, and Arizona, have used the CM/GC project delivery method on Federal-aid highway projects under FHWA's SEP-14 program with varying degrees of success. These projects have shown that early contractor involvement through the CM/GC method has the potential to improve the quality, performance, and cost of the project while ensuring that construction issues are addressed and resolved early in the project development process.

The CM/GC contractor's constructability input during the design process is used to supplement, but not replace or duplicate, the engineering or design services provided by the contracting agency or its consultant. A CM/GC contractor does not provide engineering services. More information about the CM/GC project delivery method can be found on the FHWA's Every Day Counts Web page at http://www.fhwa.dot.gov/everydaycounts/edctwo/2012/cmgc.cfm.

Notice of Proposed Rulemaking (NPRM)

On June 29, 2015, FHWA published an NPRM in the Federal Register at 80 FR 36939 soliciting public comments on its proposal to adopt new regulations. Comments were submitted by nine State Transportation Agencies (STAs),1 six industry associations, and one private individual.

1 In this rule FHWA uses the term STA to refer to State Transportation Departments (STD). STA and STD have the same meaning and are used interchangeably in 23 CFR part 635.

Analysis of NPRM Comments and FHWA Response

The following summarizes the comments submitted to the docket on the NPRM, notes where and why FHWA has made changes to the final rule, and explains why certain recommendations or suggestions have not been incorporated into the final rule.

Generally speaking, most commenters agreed that the proposed rule implements the statutory requirements. The majority of the comments related to requests for clarification or interpretation of various provisions in the proposed regulatory text. The FHWA has carefully reviewed and analyzed all comments and, where appropriate, made revisions to the rule.

General

The NYSDOT generally supported the proposed regulations and expressed an appreciation for the flexibility allowed by FHWA in various requirements, such as the method of selecting different project delivery methods, developing early work packages, establishing self-perform requirements, and other requirements related to the CM/GC contract method. The FHWA appreciates these comments and finds no substantive response is needed.

The American Association of State Highway and Transportation Officials (AASHTO) indicated the NPRM is consistent with State environmental requirements and protects the integrity of the National Environmental Policy Act (NEPA) decisionmaking process by including specific safeguards to ensure the NEPA decisionmaking process is not biased by the existence of a CM/GC contract and that all reasonable alternatives will be fairly considered when a project involves an Environmental Impact Statement (EIS) or Environmental Assessment (EA). The FHWA appreciates these comments and finds no substantive response is needed.

The Professional Engineers in California Government (PECG) expressed concerns that the CM/GC contracting method will result in non-competitive awards of construction contracts. The group stated the CM/GC contracting method may lead to situations where there is an inherent conflict of interest in having the contractor provide input during the design phase (e.g., a contractor's recommendation to use a specific material because it believes that there is more profitability with that material over another). The PECG believed that CM/GC contracting may result in situations where there is little cost competition because some contracting agencies may be subject to undue pressure to agree to proposed prices to avoid the risk of delaying important highway projects. In response, FHWA has no evidence of situations where a contracting agency was misled by a contractor's recommendation for materials or construction methods. Ultimately, the contracting agency is responsible for the design and material selection issues. Given this responsibility, it is unlikely that there would be an inherent conflict of interest in the design or material selection process. The FHWA acknowledges that some contracting agencies may experience schedule pressures, but all public agencies are responsible for cost, schedule, and quality issues in the development of their projects. The FHWA did not make any revisions to the proposed regulatory text as a result of this comment.

The Minnesota DOT indicated that the proposed provisions in this section would allow certain preconstruction services associated with preliminary design to be authorized but would not provide sufficient flexibility for other limited actions, such as the acquisition of long-lead-time materials, prior to completing NEPA, even at the STA's own risk. The Minnesota DOT stated that materials acquired solely with State funds would not be incorporated into the project until NEPA is complete and would follow FHWA's procurement requirements. The Minnesota DOT recommended that such at-risk work should be eligible for Federal participation once the NEPA evaluation process is completed, and FHWA authorizes construction.

In response, contracting agencies should be aware that 23 U.S.C. 112(b)(4) does not allow construction activities (even at-risk activities) before the conclusion of the NEPA process (and only allows for contracting agency final design activities on an at-risk basis). Title 23 U.S.C. 112(b)(4)(C)(ii) expressly prohibits a contracting agency from awarding the construction services phase of a contract, and from proceeding or permitting any consultant or contractor to proceed with construction until completion of the environmental review process. The FHWA considers the acquisition of materials, even on an at-risk basis, to be a “construction” activity. Even when performed on an at-risk basis, the early acquisition of materials is an indication that the contracting agency has made a commitment of resources—possibly prejudicing the selection of alternatives before making a final NEPA decision.

The NYSDOT stated that the regulation should provide for an exception to the limitation on final design activities for design elements that are necessary to complete the NEPA process (e.g., to secure environmental approval, an element of the project common to all alternatives may need to be completely designed). The FHWA appreciates this comment but believes that the definition of preliminary design (as contained in 23 CFR 636.103 and referenced in 23 CFR 635.502) is sufficiently broad to include such necessary design work so long as it does not materially affect the objective consideration of alternatives in the NEPA review process. In addition, 23 U.S.C. 139(f)(4)(D) provides authority for a higher level of design for the preferred alternative, subject to conditions in that provision.

In developing the provisions for at-risk activities in the rule, FHWA considered the MAP-21 revisions to 23 U.S.C. 112(b) that added two provisions relating to final design. Section 112(b)(4)(C)(ii) prohibits a contracting agency from proceeding, or permitting any consultant or contractor to proceed, with final design until completion of the NEPA process. Additionally, MAP-21 included language, codified at 23 U.S.C. 112(b)(4)(C)(iv)(I), providing that a contracting agency may proceed at its own expense with design activities at any level of detail for a project before completion of the NEPA process for the project without affecting subsequent approvals required for the project.2 As noted in the NPRM, FHWA considered these provisions together to determine whether it could give meaning to both. This is consistent with applicable conventions of statutory interpretation. The FHWA determined both provisions could be applied if they are interpreted to prohibit FHWA approval or authorization of financial support for final design work before the conclusion of NEPA, but to allow final design work by a contracting agency solely at its own risk.

Other NEPA requirements and policies, including 40 CFR 1506.1(a)-(b) and FHWA Order 6640.1A—FHWA Policy on Permissible Project Related Activities During the NEPA Process, limit agencies from taking actions that might limit the choice of reasonable alternatives in the NEPA review process. The FHWA has a responsibility to ensure compliance with all aspects of the NEPA review process in any federally assisted project, and thus it is important that States not take any actions that might be perceived as limiting the choice of reasonable alternatives—even if those actions are 100 percent State-funded actions taken at the State's financial risk. It is important for FHWA and its partners to be consistent with this issue on both a project-level and national-program basis.

Based on the comments from the Minnesota DOT, NYSDOT, and other commenters, FHWA believes further clarification of allowable at-risk construction activities on CM/GC projects is appropriate. As a result of these comments, we have provided appropriate revisions to the definition of `early work package' in sections 635.502 and 635.505(b), to clarify what constitutes an early work package and the timing limitations applicable to early work packages. See the discussion in this preamble for each of these sections.

The National Association of Surety Bond Producers (NASBP), the Surety & Fidelity Association of America (SFAA), and the American Subcontractors Association, Inc. (ASA) submitted combined comments. In part, their comments suggested that FHWA revise the appropriate sections of 23 CFR part 630 to clarify the applicability of part 630 to projects that are pursued as public private partnerships (PPP) and receive Federal credit or loan assistance. These associations expressed an interest in ensuring that all Federal assistance is reported for transparency and accountability for long-term PPP agreements. No revisions were made to the proposed regulatory text as these comments are outside of the scope of this rulemaking, and existing USDOT program regulations (49 CFR part 80) and guidance address accountability for Federal credit-based funding in PPP projects.

Part 635—Construction and MaintenanceSubpart A—Contract ProceduresSection 635.110—Licensing and Qualifications of Contractors

The NASBP, SFAA, and ASA recommended that FHWA require contracting agencies to follow the bonding requirements in 49 CFR 18.36—“Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments” (currently 2 CFR 200.325 in 2 CFR part 200—“Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards”). They also suggested that FHWA set appropriate minimum requirements for bonding and other procurement requirements for PPP projects. In response, we note FHWA's contracting regulations do not specify the process or provide requirements for furnishing performance bonds on Federal-aid projects. In general, the contracting agencies may use their own procedures and requirements for bonding, insurance, prequalification, qualification, or licensing of contractors on Federal-aid projects as long as those procedures do not restrict competition (23 CFR 635.110(b)). The revision to this section simply clarifies that this general requirement applies to CM/GC contracting. In general, the provisions of 2 CFR part 200 apply to all Federal assistance programs, except where an authorizing statute provides otherwise. For contracting under the Federal-aid highway program, 23 U.S.C. 112 provides the authority, and the regulations in 23 CFR part 635 implement specific requirements, for construction contracting, including performance bonding requirements. Therefore, the provisions of 23 CFR 635.110 are applicable to all Title 23 funded construction projects, and FHWA did not make any revisions to this section.

The AASHTO provided a recommendation to clarify this section to ensure that both CM/GC and design-build projects are subject to the contracting agency's own bonding, insurance, licensing, qualification, or prequalification procedures. The NPRM proposed to revise the first sentence of subsection (f) to make such clarification. The FHWA reviewed the proposed language and made minor clarifying edits to make it clear the provision applies to both design-build and CM/GC projects. The FHWA concluded the provision is otherwise clear as proposed and therefore made no further revision to the proposed language.

Section 635.112—Advertising for Bids and Proposals

The Idaho Transportation Department (ITD) suggested that FHWA's approval of projects included on the Statewide Transportation Improvement Program (STIP) also serve as FHWA's approval of the project for advertising for bids and proposals. The ITD suggested that separate FHWA review and approvals would inevitably delay projects. In response, FHWA notes that the cost information typically available at the time the STIP is developed is preliminary in nature and does not provide sufficient information regarding the project scope and estimated cost for construction authorization purposes. Therefore, FHWA made no revisions to the proposed language.

Section 635.113—Bid Opening and Bid Tabulations

The ITD suggested adding language to the rule that would require the use of low bid procedures if the contracting agency and the CM/GC contractor do not reach an agreed price for construction of the project. In response, FHWA does not want to limit contracting agencies to the use of competitive sealed bidding in circumstances where an agreed price is not reached with the CM/GC contractor. It is possible that another competitive delivery method (such as design-build) could be appropriate for unique projects. Given the need for flexibility in this area, FHWA made no revisions in response to this comment.

Section 635.122—Participation in Progress Payments

The Michigan DOT asked for clarification whether the solicitation document (early in the project development process) needs to specify the method for making construction phase payments. The Michigan DOT recommended that the final rule provide more flexibility to allow contracting agencies to determine the payment method later in the process as long as the method is clearly defined in the construction contract. The Michigan DOT stated that the payment mechanism is one area where risks can be mitigated and transferred effectively. The FHWA agrees with this comment and modified the provision to require the State Transportation Department (STD) to define its procedures for making construction phase progress payments in either the CM/GC solicitation document or the construction services contract documents.

The Colorado DOT commented on the preamble discussion for this section and asked if the contracting agency could negotiate the agreed price for construction with the CM/GC contractor before the NEPA review of the project is complete. In response, FHWA notes section 635.505(b) prohibits the contracting agency from awarding the construction services phase of a CM/GC contract before NEPA is complete. The regulation, however, does not prohibit the parties from undertaking the evaluation and negotiation processes that precede such award.

The Maryland State Highway Administration (SHA) asked for clarification whether the term “Request for Proposals document” in the proposed language for section 635.309(p)(1)(vi) was in reference to the initial solicitation document or a Request for Proposals for an agreed price for construction services. In response to this comment, FHWA clarifies the provision establishes requirements for design-build Request for Proposals and CM/GC initial solicitation documents. The FHWA edited the references in the provision to better reflect this intended meaning.

The AASHTO expressed a concern that, should the contracting agency desire to include a percent fee when compensating the contractor, it may not be included in the definition and, therefore, not allowed under the rule. The AASHTO suggested adding language to the definition that says the term includes all costs to supervise and administer physical construction work, including fees paid to the CM/GC contractor for project administration. The FHWA acknowledges that, in some instances, payment of a fee to a CM/GC contractor may be an eligible cost. However, after considering the comment, we concluded the eligibility of fees should be addressed on a contract-specific basis. In response to the comment, FHWA added language to the final rule definition that clarifies the term “construction services” includes all costs to perform, supervise, and administer physical construction work for the project.

The Connecticut DOT suggested adding the phrase “[f]or which this portion will be determined by the STA through consideration of the complexity and additional factors associated with each individual project” after the phrase “project or portion of the project.” The FHWA concluded, however, that it was not clear the addition would clarify the definition and therefore did not accept this proposed revision. The Delaware DOT suggested that the definition of “construction services” should be modified to account for the possibility that the construction manager does not perform the construction work because an agreed price cannot be negotiated. This possibility is addressed through the provisions in section 635.504(b)(6), and therefore, FHWA did not make this proposed revision to the definition.

Additionally, due to concerns raised by the Minnesota and Connecticut DOTs regarding the statutory requirement for FHWA approval of a price estimate for the entire project before authorizing construction activities (23 U.S.C. 112(b)(4)(C)(iii)(I)), FHWA reviewed the definition of “construction services” for clarity. The FHWA determined the last sentence in the proposed definition, concerning procurement and authorization procedures, could cause confusion and could be read as conflicting with requirements in section 635.506(d)(2) of the final rule. For these reasons, FHWA is removing the last sentence in the NPRM definition of “construction services.”

Early Work Package

The Colorado DOT expressed a concern that the preamble language does not allow contracting agencies to perform long-lead time procurements for materials, equipment, and items at risk. The Minnesota DOT expressed a similar concern and suggested that contracting agencies be allowed to acquire long-lead time materials at their own risk, but not be allowed to install the material prior to the completion of the NEPA process.

For the reasons noted in the discussion for section 630.106, FHWA revised the definition of an early work package to include examples of early construction work, which may not be performed prior to the conclusion of NEPA, even on an at-risk basis (e.g., site preparation, structure demolition, hazardous material abatement/treatment/removal, early material acquisition/fabrication contracts, or any action that may materially affect the objective consideration of alternatives in the NEPA review process). Based on the concerns expressed by the Minnesota DOT and Colorado DOT, FHWA also added language in the definition of “preconstruction service” and in section 635.505(b) to clarify allowable preconstruction activities and emphasize that early construction packages are not allowed until NEPA is complete. In further response to comments questioning the clarity of the definition and the timing of early work package authorizations, FHWA added language to clarify two provisions in the definition that relate to pricing. First, FHWA clarified the type of risks (construction risks) that must be understood before the contracting agency and the CM/GC contractor can agree on a price. The FHWA also inserted into the definition an explicit reference to section 635.506(d)(2), to make it clear that FHWA approval of the price estimate for construction of the entire project must occur before it can authorize any early work package. In addition to the responses above, FHWA believes it is important to emphasize early work packages are for minor elements or stages of project construction that can be accomplished during the period after NEPA is complete and before design of the project is sufficient to permit the parties to reach an agreed price for construction of the project. Early work packages are not to be used to piecemeal construction of the project. Early work packages are intended to support the objective of the CM/GC contracting process, which is to expedite competitive procurement and improve project delivery through use of the two-stage contracting process.

Preconstruction Services

The Michigan DOT requested clarification as to whether the proposed definition of preconstruction services prohibits a design firm from being on the CM/GC contractor's preconstruction team if the design firm is not providing the contracting agency with design/engineering services. In response to this request, the regulation does not prohibit a CM/GC contractor from hiring a design or engineering firm for consultation during preconstruction services. This consulting firm may assist the CM/GC contractor by providing incidental engineering related services typically performed by general construction contractors, such as the preparation of site plans or falsework plans. In order to avoid conflict of interest issues, the design-engineering firm hired by the CM/GC contractor may not be the same as, or affiliated with, the design-engineering firm under contract to the contracting agency for engineering services. The FHWA does not believe it is necessary to revise the regulatory language to address this comment.

The Minnesota DOT expressed concern that the proposed definition for “preconstruction services” appeared to disallow site work for testing and other field studies before NEPA completion. The Minnesota DOT suggested that FHWA modify the definition of “preconstruction services” to include site work for testing for the contracting agency's design team and other field studies to inform the environmental process. In response, FHWA agrees with this suggestion and revises the final sentence of the definition to expressly include on-site material sampling and data collection to assist the contracting agency's design team in its preliminary design work. The definition still excludes design and engineering-related services as defined in 23 CFR 172.3.

The Minnesota DOT also suggested that FHWA broaden the definition to allow the CM/GC contractor to perform engineering typically performed by the contractor (e.g., falsework plans, shop drawings) during the preconstruction phase of the project. A private individual raised similar concerns, indicating that incidental engineering related services were not within the definition of “construction” or the definition of “engineering” in 23 CFR 172.3. The private individual requested more specificity on the types of incidental engineering work that could be offered at the preconstruction services (for example, falsework studies, shop plans, formwork studies). The FHWA agrees that it may be appropriate for the CM/GC contractor to develop certain preliminary plans typically prepared by a construction contractor (such as falsework plans) to assist the contracting agency's design team during its preconstruction activities. Shop drawings or fabrication plans, however, are considered to be an element of final design, not preliminary design, and FHWA is precluded from approving or authorizing financial support for final design activities until the NEPA process is complete. In addition, shop drawings are typically developed by a fabricator or material supplier who is under contract with a construction contractor. Even on an at-risk basis, contracting for the acquisition or fabrication of materials is not allowed before the conclusion of the NEPA process. This is necessary to prevent the perception of bias and a commitment of resources to a particular NEPA alternative. The FHWA made modifications to the definition of “preconstruction services” to provide clarity on what preconstruction services are eligible and which of these services can or cannot be provided before the completion of the NEPA process.

The Minnesota DOT asked why the proposed rule was silent on the use of subcontractors for preconstruction services. The FHWA does not believe it is necessary to address subcontractors, as the regulation applies directly to Federal-aid recipients (contracting agencies) and indirectly to CM/GC firms. The CM/GC firm may have contractual relationships with subcontractors, lower-tier subcontractors, material suppliers, etc. in accordance with applicable Federal and State requirements. Therefore, no revisions are made to the regulatory language to address this comment.

The NYSDOT asked if guidance should be provided regarding design liability issues identified in Coghlin Electrical Contractors, Inc. v. Gilbane Bldg. Co. et al., 472 Mass. 549 (2015). The FHWA believes that providing guidance regarding the applicability of this case, or other liability cases, is beyond the scope of this rule.

The Greater Contractors Association of New York (GCA) supported the distinction in the definition between design services and constructability reviews. The GCA believed that the definition makes it clear that the CM/GC contractor is providing input on constructability, scheduling, risk identification, and cost-related issues only. The FHWA agrees with this comment and does not believe that the regulatory text requires further revisions.

Section 635.504—CM/GC RequirementsSection 635.504(b)(1)

The Maryland SHA expressed concern that the NRPM did not discuss allowable procurement practices (e.g., discussions, procedures for request for proposals, competitive ranges). It requested clarification that State procedures be allowable where FHWA's regulation is silent on an issue. The FHWA agrees with this comment and revises the regulatory text to allow for the use of applicable State or local procedures as long as these procedures do not restrict competition or conflict with Federal law or regulations. In considering this comment, FHWA also recognized the rule should be clearer that the use of State and local procedures is permissive, not mandatory. For this reason, FHWA replaced “shall” with “may” in the provision.

The ARTBA commented that it was pleased to see numerous references in the NPRM regarding the importance of open competition. At the same time, it was dismayed by the USDOT's promotion of local labor hiring preference provisions in the Federal-aid highway program and other USDOT assistance programs. It believed that such provisions are in conflict with the principles of open competition. This particular comment is outside of the scope of this rulemaking, and FHWA did not make changes in response to the comment. Local hiring preference is the subject of a separate rulemaking, “Geographic-Based Hiring Preferences in Administering Federal Awards” [Docket DOT-OST-2015-0013; RIN 2105-AE38], 80 FR 12092 (Mar. 6, 2016).

Section 635.504(b)(2)

The AGC referenced the procurement requirements in this section of the NPRM and recommended that FHWA include a discussion of what is the expectation in the construction services portion of a contracting agency's solicitation. The AGC suggested that contracting agencies should clarify whether the CM/GC contractor's responsibilities are limited to providing constructability and material reviews, or whether the CM/GC contractor is expected to perform design services. The AGC referenced recent cases that showed a trend of liability and responsibility being assigned to CM/GC contractors related to the preconstruction phase of the contract for what have been considered professional services provided. The FHWA does not believe that the regulatory language requires clarifications. The definition of “preconstruction services” in section 635.502 specifically excludes design and engineering-related services as defined in 23 CFR part 172.

Section 635.504(b)(3)

The ARTBA expressed several concerns regarding objectivity and transparency of the selection process for alternative contracting methods. The ARTBA agreed that the NPRM language is consistent with the provision in MAP-21 that gives flexibility to the contracting agency in determining factors for the selection of the CM/GC contractor, but wished to underscore the importance of certain procurement requirements (such as interviews) to ensure integrity and enlist the participation of the industry in CM/GC projects. The ARTBA highlighted the importance of clarity and disclosure in all procurement documents. The FHWA agrees with ARTBA's general comments that clarity and transparency are important in the procurement process. Section 635.504(b)(3)(ii) requires solicitation documents to list the evaluation factors and significant subfactors and their relative importance in evaluating proposals. This provision does not require contracting agencies to use any particular method of identifying relative importance. There are a number of ways to do so, such as by the assignment of specific weights or percentages to the factors, or by listing the evaluation criteria in descending order of importance. This decision about how to do the procurement rests with the contracting agency under 23 U.S.C. 112(b)(4)(B). Under section 635.504(b)(3)(ii), the contracting agency must disclose the evaluation criteria it will use, and the relative importance of the criteria, in the solicitation documents.

In connection with section 635.504(b)(3)(iv), Michigan DOT recommended that FHWA provide some flexibility in allowing the contracting agency to decide whether interviews would be necessary after the receipt of responses to the solicitation but before establishing a final rank. The Michigan DOT indicated that the contracting agency should have the flexibility to determine whether interviews are needed, based upon the strength of written responses to the solicitation document. The Michigan DOT indicated that in some cases, interviews might not be necessary if there were a significant separation between one team and all others. Similarly, the ITD commented that interviews should be conducted at the discretion of the State when the topped ranked firms are close in score, and the evaluation team should determine appropriate additional criteria to be evaluated in the interview. In response, FHWA believes Michigan DOT and ITD have raised valid points for those circumstances where it may not be necessary to interview firms before establishing the final rank. In the final rule, if interviews are used, the contracting agency must offer the opportunity for an interview to all short listed firms (or firms that submitted responsive proposals, if a short list is not used) as required by section 635.504(b)(4). In response to the comments, we have added a parenthetical to section 635.504(b)(3)(iv) so that the provision explicitly recognizes contracting agencies may reserve the right to make a final determination whether interviews are needed based on responses to the solicitation. The FHWA disagrees with ITD, however, about flexibility for the proposal evaluation team to establish additional criteria applicable to the interview process. The FHWA does not believe adding criteria not disclosed in the solicitation documents is conducive to open and transparent competition. For that reason, no change is made to the rule in response to this comment. Under section 635.504(b)(3)(ii), contracting agencies must identify in the solicitation documents their intent to use, or not use, interviews and the relative importance of the interviews as part of the evaluation criteria. The contracting agency must disclose in the solicitation documents any criteria specific to the interview phase, including its relative importance with respect to all evaluation factors.

The AGC suggested that FHWA encourage the use of interviews in the selection process and clarify what value (percent of selection ranking) will be given to the interview. The FHWA agrees that interviews are important element of the selection process, and if used, it is important for proposers to understand the value that contracting agencies will assign to the interview. Section 635.504(b)(3)(ii) requires inclusion in the solicitation documents of the relative importance of evaluation factors, and this requirement would apply to the use of interviews. For this reason, FHWA did not revise the rule in response to this comment.

The AGC also suggested that FHWA add a new section recommending the use of a short list process where only a limited number of firms are selected to proceed through the procurement process and that FHWA require the solicitation to identify the number of firms to be included on the short list. After considering the comment, FHWA concluded the use of shortlisting is a topic that normally would be included in contracting agencies' CM/GC procurement procedures. This procurement process detail is best left to the discretion of the contracting agency, consistent with 23 U.S.C. 112 (b)(4)(B). Those procedures are subject to FHWA approval under section 635.504(c), and will be publicly available. For these reasons, no changes are made to the NPRM language in response to these AGC comments.

The NYSDOT indicated that the NPRM was silent regarding best practices in the administration of CM/GC projects. As an example, it cited the practice of ensuring interaction and coordination between the contracting agency's design or engineering consultant (if out-sourced) and the CM/GC contractor. The NYSDOT suggested that FHWA consider the need for issuing guidance related to other best practices such as risk management plans. The FHWA agrees that coordination and interaction between the contracting agency's designer (if out-sourced) and the CM/GC contractor is desirable, but this is a matter of administrative practice best addressed by the contracting agency. The issuance of guidance on best practices related to the administration of CM/GC projects is outside of the scope of this rulemaking, and FHWA made no changes to the rule in response to these comments.

Section 635.504(b)(5)

The ITD suggested that approvals by the FHWA Division Administrator be limited to approving changes to the approved State solicitation template documents. The FHWA's role in the CM/GC project approval and authorization process is described in section 635.506, and this comment is addressed in the discussion of that section. Therefore, FHWA did not make changes to this section.

Section 635.504(b)(6)

The Minnesota DOT suggested allowing additional flexibility in situations where the contracting agency and CM/GC contractor are unable to reach agreement on price and schedule for construction services (including early work packages). In particular, the commenter suggested the rule expressly allow flexibility in such cases for the contracting agency to use design-build contracting for the project or individual work packages. The proposed rule suggested that the traditional competitive bidding process be used in these situations. In response, FHWA recognizes that there may be circumstances where it would be appropriate to have the option of using either competitive bidding (23 CFR 635.112) or another approved method, such as design-build contracting under 23 CFR part 636, for both early work packages and the main portion of project construction (i.e., project construction exclusive of any early work packages). The FHWA revised the first sentence of the paragraph by adding “or another approved method” at the end of the sentence. The FHWA also deleted the proposed language in the paragraph that would have prohibited the contracting agency, once it advertises for bids or proposals for the project or a portion of the project (early work packages), from using the CM/GC agreed price procedures. Under the final rule, when the contracting agency and the CM/GC contractor fail to agree on a price for an early work package, the contracting agency may perform that work itself under force account provisions, or may undertake a new procurement for that early work package, without affecting its ability to use CM/GC agreed price procedures for other early work packages and for construction services for the main portion of the project.

The AASHTO noted that the proposed provisions of this section (requiring a transition to competitive bidding if the contracting agency and CM/GC contractor are unwilling or unable to enter into a contract for construction services) create a potential conflict with the CM/GC laws of at least one State. Apparently, this unidentified State's statute allows the contracting agency to enter into negotiations with the next highest scored firm(s) until agreement is reached or the process is terminated. The AASHTO provided a recommended revision which would allow such a State to enter into negotiations with the highest ranked firm from the original solicitation for CM/GC services. From FHWA's perspective, the level of design would typically be 60 percent to 90 percent complete when final negotiations for construction services for the main portion of the project take place with the CM/GC contractor. If the contracting agency and the CM/GC contractor are not able to reach agreement regarding schedule and price, then it is in the public interest to transition to a new procurement and solicit competitive bids or proposals from all firms that might be interested in the construction services phase. It is not logical to enter into negotiations for construction services with a firm that was the next highest ranked firm for the preconstruction services because, at this point in the project delivery process, a large portion of the advisory services provided by the CM/GC firm for the preconstruction phase have been completed. In addition, the importance the contracting agency places on various qualifications and contractor experience may be different when it is seeking only construction services, as compared to seeking a combination of preconstruction and construction services. Thus, it does not make sense to enter into negotiations with the second highest scoring CM/GC firm merely for the sake of finalizing input and obtaining construction pricing. Where the contracting agency and CM/GC contractor are unwilling or unable to enter into a contract for construction services, it is appropriate to require either competitive sealed bidding (23 CFR 635.112) or a transition to another approved contracting method, such as design-build contracting under 23 CFR part 636. Therefore, FHWA is not adopting AASHTO's recommendation.

The Connecticut DOT suggested that the requirement in this section for FHWA approval before advertising for construction bids or proposals be removed. The Connecticut DOT believed that an additional round of FHWA approvals would be more cumbersome than beneficial. The FHWA does not agree with this recommendation. In situations where the contracting agency and CM/GC contractor are unwilling or unable to enter into a contract for construction services, it is appropriate that the contracting agency notify the FHWA Division Administrator of this decision and request FHWA's concurrence before advertising for construction bids or proposals in accordance with 23 CFR 635.112 (bid-build) or 23 CFR part 636 (design-build). The reason is that contracting agency is effectively converting from a CM/GC contracting process to a non-CM/GC process subject to separate bidding requirements under title 23 (e.g., bid-build or design-build). In such case, FHWA approval provisions applicable to those procedures will apply. In considering the comments, however, FHWA recognizes there is potential for confusion due to the use of the term “notification” in the proposed rule language. In the final rule, FHWA has substituted the term “concurrence” for “notification” in the first sentence of paragraph (6). This change better reflects FHWA's intent, which is that the contracting agency will follow appropriate procedures for required FHWA approvals prior to issuing new bid/proposal documents. The change makes the rule more consistent with the concurrence concepts used in 23 CFR 635.114(h) and 636.109(c). The concurrence point will help to ensure that FHWA's requirements are being met for before a new solicitation starts.

The ITD suggested using the term “competitive advantage” or better defining the term “conflict of interest.” The Delaware DOT suggested a clarification of the terms in this section to say that “. . . the contracting agency may prohibit the CM/GC contractor from submitting competitive bids during the construction phase of the contract if the contracting agency determines that the inclusion of the CM/GC contractor may inhibit fair and open competition among the bidders.” The FHWA generally agrees with these comments. The final rule permits the contracting agency to exclude the CM/GC contractor from bidding on construction of the project if the contracting agency determines the CM/GC contractor is likely to have a competitive advantage that could adversely affect fair and open competition.

The ARTBA commented that the contracting agency's ability to preclude a CM/GC contractor from bidding on the construction services contract if the agency and firm have been unable to agree on a price will be a risk allocation factor affecting the price of CM/GC proposals. The commenter stated this type of provision should be clearly delineated in the initial CM/GC procurement documents and elsewhere. The GCA raised similar concerns. It suggested that the contracting agency's original solicitation must outline the process for how the project will be handled if the agency and the CM/GC contractor cannot reach agreement on a final contract. The GCA noted that the NPRM allows the contracting agency the option of allowing or preventing the CM/GC contractor from bidding on the construction in the event a final contract is not negotiated. The GCA believed that this is not acceptable because it exposes the CM/GC contactor to the risk that an agency will simply refuse to negotiate a reasonable price and thereby gain the advantage of the CM/GC's proposal without entering into a contract.

In response, FHWA recognizes that the possibility of contract termination for failure to agree on price for construction creates some risk to the CM/GC contractor when performing preconstruction services. FHWA decided not to revise the rule in response to these comments, however. First, the authority for such termination appears in the rule, which places potential CM/GC contractors on notice of the risk. We also expect contracting agencies to include this termination authority in their CM/GC contract documents. Under section 635.504(b)(3)(v), the solicitation documents must include or reference sample contract forms. Second, a decision to preclude the CM/GC contractor from bidding on construction (including an early work package where the parties failed to reach an agreed price) under a new procurement will be a very fact-specific determination that depends on the circumstances of the particular project. Facts relevant to the decision about a real or apparent competitive advantage often will not be fully available until well after the solicitation process has resulted in the selection of a CM/GC contractor. This would make it difficult for a contracting agency to make that decision at the time the CM/GC solicitation document is developed. The FHWA concluded it is important to provide contracting agencies with flexibility in timing their determination whether the CM/GC contractor has a competitive advantage that could adversely affect fair and open competition for the work in question. That said, we believe contracting agencies need to be consistent with their State policies related to competition (and apparent competitive advantage). The contracting industry appropriately expects fairness and transparency in an owner's procurement process—including any notices to the industry in the solicitation process. Both the owner and the industry rightfully expect good faith negotiations regarding scope, schedule, and price for construction.

Section 635.504(c)

The FHWA received some comments on this section that relate to the relationship between CM/GC provisions and FHWA's Risk-Based Stewardship and Oversight (RSBO) Program. The FHWA's RSBO Program is meant to optimize the successful delivery of programs and projects and ensure compliance with Federal requirements. This risk-based program involves three main avenues: (1) Project approval actions, (2) data-driven compliance assurance, and (3) risk-based stewardship and oversight involvement in Projects of Division Interest (PoDIs) and Projects of Corporate Interest (PoCIs). The FHWA Division Offices are required to execute a Stewardship and Oversight agreement with their respective STA for the oversight of Federal-aid projects, including PoDI and PoCI projects. This agreement establishes the roles and responsibilities for project actions that require FHWA approval.

The Michigan DOT suggested that FHWA's review and approval of a State's procurement document should constitute FHWA's approval to use the CM/GC contracting method for all Federal-aid projects except those where full oversight is needed (e.g., PoDIs or PoCIs). The Michigan DOT indicated that for non-PoDI or non-PoCI projects, FHWA's involvement could be designated in the STA's approved CM/GC procurement procedures, and therefore, the Michigan DOT recommended that FHWA revise numerous sections in part 635 to eliminate the requirement for FHWA approvals for non-PoCI and non-PoDI projects. The FHWA does not agree with this suggestion. Given the differences in FHWA's Stewardship and Oversight Agreements from State-to-State, it is not appropriate to implement a change that would eliminate FHWA Division Office review/approval requirements in our regulations. The FHWA Division Offices have the authority to assess program risks in their States and come to an agreement with their respective States regarding the stewardship of the Federal-aid program. Section 635.506(a) provides a discussion of the flexibilities that are available for States in assuming certain FHWA responsibilities for project approval actions. The Stewardship and Oversight Agreement will formalize these responsibilities in each State. It is expected that the State's assumption of FHWA responsibilities will vary from State-to-State (even on PoDI and PoCI projects), and therefore, no revisions are made in section 635.504(c) related to this recommendation.

Section 635.504(d)

Two commenters on this section, Minnesota DOT and Connecticut DOT, suggested clarification of the terms used and requirements included in this section. The Minnesota DOT indicated that the NPRM appeared to require each construction services contract (i.e., each work package) to include a minimum 30 percent self-performance requirement. The Minnesota DOT said that the application of the self-performance requirement might not be appropriate for particular work packages, such as supplying long lead time materials. The Minnesota DOT suggested that the rule specifically exclude providing materials from the self-performance requirement. They also suggested that the 30 percent self-performance requirement apply to the project overall and not to each individual work package. The Connecticut DOT suggested that the application of the 30 percent self-performance requirement be left to the discretion of the contracting agency, which would allow the use of the Construction Manager-at-Risk concept where the CM/GC contractor serves totally as a construction manager and does not perform any construction during the construction services phase of the project.

The three contracting associations providing comments on this section strongly supported the use of self-performance requirements; however, they differed in their recommended revisions to the NPRM. The AGC supported the use of the traditional 30 percent self-performance minimum requirement and suggested that the rule point out that States are free to use a higher self-performance requirement if they so desire or are mandated under State law. The AGC suggested that the regulation should clarify that there is no upper limit on self-performed work and that the “total cost of construction services” should be inclusive of any early work packages and/or task orders. The AGC took exception to the sentence that would allow States to require the CM/GC contractor to competitively let and award subcontracts for construction services to the lowest responsive bidder if required by State law. The AGC believed that it is imperative that the CM/GC contractor have control over the solicitation, selection, and administration of subcontractors in much the same way as subcontractors are selected through the traditional design-bid-build process.

The GCA had similar concerns. It indicated that it is critical to assure taxpayers that the contractor awarded the contract is the entity responsible for building the project and meeting all obligations. The GCA contended that contracting agencies must ensure that the CM/GC contractor has the same contractual responsibilities as a general contractor during the construction services phase of the project by ensuring that the CM/GC contractor has full control of the subcontractor selection process and is contractually and financially liable for delivering the project on schedule and at a fixed price. The GCA noted that a self-performance requirement of 40-50 percent is common in the industry and recommended that the CM/GC model contain a self-performance requirement higher than the NPRM 30 percent minimum.

The ARTBA also noted the importance of recognizing the difference between CM/GC contracting as currently used by transportation agencies and its use in the “vertical” construction industry. The ARTBA noted that by maximizing self-performance, CM/GC contractors can maximize innovation and efficiency, and enhance the value for the project's owner-agency and the taxpayers. This process is in contrast to the customary practices in the vertical building industry, where the “construction manager” is often a broker of construction services by other firms.

In response, FHWA is not adopting the Connecticut DOT suggestion that the self-performance requirement be left to the contracting agency's discretion so that the CM/GC contractor can serve in a solely managerial capacity during the construction services phase of the project. The FHWA recognizes such practice occurs in vertical construction, but it is not authorized under 23 U.S.C. 112(b)(4), which requires the CM/GC contractor to be responsible for construction of the project where the parties reach an agreed price for construction services.

After considering the comments, FHWA is revising the rule to clarify that the 30 percent self-performance requirement applies to the total of all construction services performed under the CM/GC contract, not to each individual contract for early work packages and construction services for the main portion of the project. The CM/GC contractor should take steps to ensure its work meets this requirement, which may necessitate adjustments in work performance as the construction work progresses. The exception for specialty work is retained, but FHWA has not expanded the exception to materials. The NPRM language was clear that the 30 percent criteria is a minimum, and contracting agencies have the discretion to set higher threshold if provided for by State or local policy. The final rule retains that language. The FHWA is not revising the sentence that allows contracting agencies to require the CM/GC contractor to competitively let and award subcontracts for construction services to the lowest responsive bidder if required by State law, regulation, or administrative policy. The MAP-21 Section 1303 requirements did not address this issue, and FHWA believes that it is appropriate to allow States to develop their own policies.

Finally, it is important to note in this context that awards of subcontracts must be in accordance with the Disadvantaged Business Enterprise (DBE) regulations in 49 CFR part 26, including the good faith efforts requirements at 49 CFR 26.53 when a DBE contract goal has been set on the contract. Further discussion of FHWA's DBE requirements for CM/GC contracts is provided below in the response to comments on section 635.506(e).

Section 635.504(e)

The Connecticut DOT noted that this section allows for compensation based on actual costs and commented that the accompanying requirement of indirect cost determinations would render this an extremely burdensome option for the CM/GC contractor and contracting agency. The Connecticut DOT recommended that FHWA consider eliminating this option since actual costs are not defined and would probably need to be audited; indirect cost rates would also need to be negotiated, audited, and established. If this method were to remain an option, the Connecticut DOT recommended that the indirect cost be defined as a specific amount, such as 10 percent. The FHWA believes that the use of actual cost rates would be very rare; however, there may be specific circumstances where it might be advantageous for a contracting agency to do so. In these cases, it is important to give the contracting agencies the flexibility to do this. FHWA does not believe that limiting indirect costs to 10 percent of direct costs is appropriate and, therefore, did not adopt any limitations.

When reviewing this comment from Connecticut DOT, FHWA recognized the need for a correction in section 635.504(e). In the NPRM, language relating to indirect cost rates was mistakenly placed in paragraph 635.504(e)(3) rather than in paragraph (e)(2). The FHWA corrected this error in the final rule.

The Connecticut DOT requested that FHWA provide clarification for the basis for prohibiting the use of “cost plus a percentage of cost and percentage of construction cost methods” as methods of payment for preconstruction services. In response, FHWA notes that under these payment methods, there is a potential conflict of interest between the contractor's professional responsibility to the contracting agency and the contractor's financial interest in maximizing revenues. This is inherent in cost plus percentage of cost compensation, creating little incentive for the contractor to control its administrative costs or provide recommendations that would result in a more cost effective project. Furthermore, the use of the cost plus a percentage of cost and percentage of construction cost methods of contracting is prohibited in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200.323(d)). The FHWA made no revisions to the regulatory text in response to this comment. In reviewing the comment from Connecticut DOT on this topic, however, FHWA determined that including a similar sentence in paragraph (e)(3) (method of payment for construction services) would eliminate any confusion to the applicability of 2 CFR 200.323(d) for construction services payment methods.

Section 635.505—Relationship to the NEPA Process

As is evident from this preamble's discussion of individual sections of the rule, there is some uncertainty among stakeholders about the types of CM/GC contractor activities allowed before the completion of the NEPA review for the project. The FHWA believes it may be useful to summarize how CM/GC contractor services can be used before the conclusion of NEPA under this rule as well as applicable NEPA requirements. This summary consolidates, and expands on, FHWA's responses to specific comments on section 635.505.

• The FHWA may approve and authorize financial support for necessary and reasonable CM/GC contractor costs related to preconstruction activities including but not limited to: Cost estimating, scheduling; constructability reviews/recommendations; risk analysis; development of implementation plans as required by the contracting agency (safety plans, environmental compliance plans, quality control plans, hazardous material plans, etc.); field studies that assist with preliminary design, including site coring and sampling; site studies; and other activities that do not materially affect the objective consideration of NEPA alternatives;

• On an at-risk basis, the contracting agency may perform at-risk final design activities at any level of detail and may contract with the CM/GC firm to perform preconstruction services related to final design if the contracting agency has a procedure for segregating the costs of the CM/GC contractor's at-risk work from the CM/GC contractor's preconstruction services eligible for reimbursement during the NEPA process; and

• Even on an at-risk basis, the contracting agency must not contract for (or direct the CM/GC contractor to perform) construction activities before the completion of NEPA review, including the following activities: Site preparation, demolition, hazardous material treatment/removal, materials acquisition (regardless of lead time), and fabrication of materials or other activities that would adversely affect the objective consideration of NEPA alternatives. Plans or submittals that require an agreement/contract with a supplier or fabricator, such as shop drawings or fabrication plans, are not allowed, even on an at-risk basis prior to the completion of the NEPA review process.

Section 635.505(b)

The Colorado DOT noted that the preamble discussion for this section prohibits contracting agencies from awarding early work packages (such as advanced material acquisition) before the NEPA review process is complete. The Colorado DOT stated that contracting agencies need an exception for long lead time procurements for advanced materials procured at their own risk. The Minnesota DOT stated that the NPRM provides for very limited pre-NEPA activities, and it specifically prohibits advanced material acquisition. The Minnesota DOT recommended that the regulations allow contracting agencies to perform limited construction services, such as procuring materials on an at-risk basis before completing the NEPA review process. The Minnesota DOT suggested that these materials would not be incorporated into the work until NEPA is complete and would follow Federal procurement rules. The Minnesota DOT also suggested that this at-risk work should be eligible for Federal reimbursement once NEPA is completed and the project is authorized.

As noted in the discussion of section 630.106, the advanced acquisition of materials, even on at-risk basis, is an early construction activity which 23 U.S.C. 112(b)(4)(C)(ii) prohibits. That provision provides that contracting agencies may not with the award of the construction services phase before the completion of the NEPA review process. The FHWA acknowledges additional clarification regarding this issue is appropriate, and therefore, we have revised paragraph (b) to prohibit the contracting agency from initiating construction activities or allowing such activities to proceed, even on an at-risk basis, prior to the completion of the NEPA process. The prohibition includes construction work self-performed by the contracting agency and contracts let by the contracting agency for construction services (including construction services under a CM/GC contract such as early work packages for advanced material acquisition or site preparation work).

Section 635.505(e)

The ITD commented that it is not readily apparent why the CM/GC contractor needs to know the NEPA alternatives, as they are only responsible for implementing the preferred alternative identified in the environmental decision. In response, while it is true that the CM/GC contractor will only be responsible for implementing the selected alternative identified in the NEPA process, the CM/GC contractor may provide technical information to the contracting agency during the preconstruction phase for use in the NEPA evaluation for the project. Issues such as constructability and cost often are relevant to the comparison of alternatives. The FHWA and the State are responsible for ensuring a fair and objective comparative evaluation of reasonable alternatives for the project under 40 CFR 1502.14. This includes an analysis of the proposed action and alternatives to it in a substantially similar manner, using consistent criteria for evaluating and screening. See Question and Answer 5b, “Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations,” Council on Environmental Quality (46 FR 18026 (March 23, 1981)), as amended (available online at https://ceq.doe.gov/nepa/regs/40/40P1.HTM). For these reasons, it is incumbent on the contracting agency to ensure it will have access to comparable data for the evaluation of the reasonable alternatives for the project. To the extent the contracting agency wishes to use data provided by the CM/GC contractor, this means the contracting agency should include provisions in its CM/GC bid and contract documents that permit it to obtain such data from the CM/GC contractor as needed. After considering the comments, FHWA agrees with the commenter that the language proposed in the NPRM did not fully capture the intended meaning. To better capture the scope of the responsibility, this section was revised to place the responsibility on the contracting agency for ensuring its CM/GC contract gives it the ability to obtain, as needed, technical information needed for a fair and objective comparative evaluation of reasonable alternatives for the project.

Section 635.505(f)

The NPRM proposed a requirement that the CM/GC contract include provisions ensuring no commitments are made to any alternative during the NEPA process, and that the comparative merits of all alternatives identified and considered during the NEPA process, including the no-build alternative, will be evaluated and fairly considered. The ITD indicated that the provisions of this section are design functions, not functions of the CM/GC contractor. In response to this comment, FHWA agrees that the NEPA requirements reflected in this section have direct applicability to the contracting agency, but they have implications for the contracting agency's consultants as well. The proposed language, which is similar to language in the design-build regulations (23 CFR 636.109(b)(4)), is intended to ensure NEPA requirements for an independent and non-biased evaluation of project alternatives are satisfied. The provision will help contracting agencies and prospective CM/GC contractors understand the issues related to the NEPA review process, the need for the CM/GC contractor to be unbiased in the advice given to the contracting agency about alternatives, and the contracting agency's role in implementing these requirements during design development. After considering the comment, FHWA concluded the provision is important to maintain the integrity of the NEPA process, and FHWA is not revising the regulatory text.

Section 635.505(h)

The Minnesota DOT noted a concern with the requirement for each construction services contract to include a provision ensuring that the CM/GC contractor will meet all environmental and mitigation measures committed to in the NEPA document. The Minnesota DOT said that in many situations, the NEPA document has mitigation measures beyond the control of the CM/GC contractor. The Minnesota DOT suggested modifying the clause to require the STA to include “applicable” commitments in each contract and deleting the “and” in the phrase “environmental and mitigation” as unnecessary. The proposed language is consistent with a provision in the design-build regulations at 23 CFR 636.109(b)(5), and FHWA believes that consistency should be maintained in the rule. FHWA agrees the provision would benefit from a clarification to address the concern that the CM/GC contractor ought not to be held responsible for environmental and mitigation work that is not part of the CM/GC contract scope of work. The FHWA revised this section to provide an exception for measures the contracting agency expressly describes in the CM/GC contract as excluded because they are the responsibility of others.

Section 635.506—Project Approvals and Authorizations

The AGC noted that the proposed FHWA review and approval requirements in this section showed a trend away from the past several years during which FHWA has given more flexibility and authority to the States in managing their Federal-aid projects. The ARTBA expressed a similar concern noting that some of the requirements for FHWA review were based on the MAP-21 provisions, while others originated from FHWA's customary stewardship practices. The AGC expressed the concern that such involvement may unnecessarily delay project activities and suggested that, if FHWA believed such reviews were necessary, FHWA should also include timeframes for approval period as to not delay the start of the work. As noted in the discussion of section 635.504(b)(5), the ITD suggested that approvals by the FHWA Division Administrator be limited to only approving changes to the approved State solicitation template documents.

In response to these comments, it should be noted that 23 U.S.C. 112(b)(4)(C)(iii) explicitly requires FHWA's review and approval of the following: (a) The price estimate of the contracting agency for the entire project and (b) any price agreement with the CM/GC contractor for the project or a portion of the project. Other proposed approvals in the NPRM are consistent with oversight provisions found in other title 23 procurement regulations, such as the design-build regulations in 23 CFR part 636. In drafting the proposed rule, FHWA believed it was appropriate to include decision points, designed to ensure the integrity of the Federal-aid Highway Program, but also to make clear which decisions may be assigned by FHWA to the STAs under the authority of 23 U.S.C. 106(c).

Under 23 U.S.C. 106(c), the States may assume certain FHWA responsibilities for project design, plans, specifications, estimates, contract awards, and inspections on the National Highway System (NHS), including projects on the Interstate System, and must assume such responsibilities off the NHS unless the State determines such assumption is inappropriate. After considering the comments, FHWA revised the regulatory text for section 635.506(a) to specify which FHWA review and approval activities in subpart E may, and which may not, be assumed by the STAs. In the final rule, section 635.506(a)(2) provides that STA's may not assume the FHWA review or approval responsibilities for section 635.504(c) and 635.506(c). The approval of procurement procedures required by section 635.504(c) is not a project specific action and cannot be delegated or assigned to the STA. The section 635.506(c) approval of at-risk preconstruction costs for eligibility after the completion of the NEPA process is a Federal-aid eligibility determination and cannot be delegated or assigned to the STA under 23 U.S.C. 106(c). In situations where the State is directly responsible for NEPA compliance (either under an assignment of environmental responsibilities pursuant to 23 U.S.C. 326 or 327, or under a programmatic categorical exclusion agreement as authorized by section 1318(d) of MAP-21), the Division Administrator may rely on a State certification indicating the NEPA-related conditions are satisfied. New section 635.506(a)(3) lists the subpart E project-related FHWA approval responsibilities that are subject to State assumption. In addition to the listed subpart E approvals, the approval of advertising under 23 CFR 635.112(j) is subject to State assumption pursuant to 23 U.S.C. 106(c). None of these approvals involve financial authorization or eligibility determinations, both of which remain solely FHWA functions. When a State first undertakes CM/GC contracting, the FHWA Division should work with the State on implementation of the requirements of this rule so that both parties can develop an understanding of which approvals the State should assume. As contracting agencies become more familiar with CM/GC contracting, it is likely that States will assume FHWA responsibilities for CM/GC project approvals listed in section 636.506(a)(3), and the risk of related delays will be minimal.

Section 635.506(a)(2)

The Connecticut DOT recommended deleting NPRM section 635.506(a)(2), which would require FHWA approval of project-specific solicitation documents. The Connecticut DOT commented that its interpretation of this requirement is that it would require FHWA approval of Requests for Qualifications and Requests for Proposals documents. The Connecticut DOT noted that for larger, more complex, projects these documents can be extremely large and would require longer than ideal review/approval periods, which would introduce additional risk to on-time project delivery. The Connecticut DOT noted that section 635.504(c) requires the submission of CM/GC procurement procedures to FHWA for approval. In response, FHWA agrees with this comment. With other methods of procurement, FHWA has no role in approving the contracting agency's procurement procedures. The requirement for FHWA to review and approve a contracting agency's CM/GC procurement procedures (including changes), combined with FHWA compliance oversight in accordance with FHWA's RSBO Program, should be sufficient to satisfy FHWA's interest. It should not be necessary for FHWA to review and approve individual solicitation documents. Therefore, FHWA removed proposed paragraph 635.506(a)(2) from the final rule. That said, FHWA emphasizes it expects all contracting agencies to follow their approved procurement procedures, and to provide for transparency and fairness in the solicitation process.

Section 635.506(b)(1)

The Michigan DOT requested clarification regarding the language and intent of this provision, which requires a contracting agency to request authorization of preliminary engineering before incurring such costs. The Michigan DOT asked if the contracting agency needs to have funds obligated before incurring costs. In response, the requirements of this section are consistent with 23 CFR 1.9(a), which requires an FHWA funding authorization through an approved project agreement before costs are incurred. However, after the comment period on the NPRM closed, Congress enacted the FAST Act, which included an uncodified provision in section 1440 relating to reimbursement, under specified conditions, of preliminary engineering costs incurred prior to authorization. The FHWA revised the final rule language to recognize the enactment of section 1440.

Section 635.506(b)(2)

The Minnesota DOT asked for clarification regarding the requirement for FHWA's Division Administrator review and approval of a cost or price analysis for every procurement before authorizing pre-construction services. The Minnesota DOT asked if the phrase “every procurement” pertains to just the pre-construction services or also construction services contracts. The Minnesota DOT also said that it was not clear if the requirement applies only when the contracting agency is requesting Federal-aid funding in preconstruction service contracts or in all situations. The FHWA agrees with the need for clarification. It is anticipated that there will be a single procurement for CM/GC preconstruction services. The requirement for a cost or price analysis would apply to that agreement and to any modifications of that agreement, when the contracting agency is requesting (or, under FAST Act section 1440, may request in the future) Federal-aid funding for the cost of preconstruction services. The FHWA revised the language of the rule to explicitly state the requirement applies to preconstruction services procurements when Federal-aid funding is involved in the preconstruction services contract. The NPRM language is further clarified by replacing the phrase “currently $150,000” with a reference to the simplified acquisition threshold in 2 CFR 200.88. This change avoids the need for amending the regulation in the event the simplified acquisition threshold changes in the future.

Section 635.506(d)(1)

The Michigan DOT asked if the language of this section requires the contracting agency to have funds obligated before incurring costs. In response to this inquiry, consistent with 23 CFR 1.9(a) and as discussed in FHWA's response to a similar comment on section 635.506(b)(1), the contracting agency must request FHWA's construction authorization through an approved project agreement before incurring any costs if Federal assistance is being requested. The FHWA made no revisions to the regulatory text.

Section 635.506(d)(2)

The Minnesota DOT and the Connecticut DOT noted that the requirement for FHWA approval of a price estimate for the entire project prior to authorizing construction activities may be problematic when early work packages are involved. The Minnesota DOT said that in these cases, it may not be possible to provide a very accurate estimate, depending on how far the design has progressed. The FHWA recognizes the Minnesota DOT's concern; however, the requirement for FHWA to approve a price estimate for the entire project is a statutory requirement (23 U.S.C. 112(b)(4)(C)(iii)). In addition, the authorization of CM/GC construction services occurs only after completion of the NEPA review, which typically includes preliminary design work that reaches (and sometimes exceeds) 80 percent. After considering the comments, FHWA concluded the contracting agency should have sufficient data available at the time of a request for construction services authorization to provide a good faith estimate of the price for the entire project. The FHWA understands that when a contracting agency is using early work packages, the level of final design for the entire project (i.e., final construction plans and detailed specifications) may not be at an advanced stage, and thus, the price estimate for the entire project at this point in the design process may not be as accurate as a detailed engineer's estimate later in the design phase. The FHWA believes, however, the contracting agencies can provide a sound enough price estimate to meet the statutory requirement. This requirement applies to the first request for an authorization for activities meeting the definition of “construction services.” Where a contracting agency requests construction authorization for only a portion of the project (e.g., early work packages), the contracting agency may submit a revised price estimate once final design is complete if such revision is needed to support subsequent authorization requests. The FHWA made no revisions in response to these comments.

The GCA noted the need for openness and transparency in the CM/GC procurement process and the need for FHWA to conduct its review and approval in a timely and reasonable manner. In response, we agree with openness and transparency are important in these procurements, but have concluded no revision is needed. We believe this rule and other applicable Federal laws (including regulations) already foster open and transparent procurement practices. In addition, States must act in accordance with State procurement integrity and other requirements. The FHWA fully appreciates the need for time and reasonable decisions on price estimates, but does not believe there is a need to establish standards in the regulation.

Section 635.506(d)(3)

As noted in the above in the discussion for section 635.506(b)(2), the use of the phrase “currently $150,000” in this section is replaced with a reference to the simplified acquisition threshold in 2 CFR 200.88. This change will avoid the need to amend this rule each time the simplified acquisition threshold is adjusted.

Section 635.506(e)

The GCA believed that the CM/GC rule should clarify that CM/GC is similar to design-build with respect to the use of DBE program requirements. The GCA believed that design-build and CM/GC are similar in that it is difficult to identify specific DBE commitments up front as part of the bid documents. The GCA stated that the CM/GC contractor should only be required to put forth the list of the DBEs to be used for work in the first year of the project, or for early work items, and, for work that will be performed in later years, to list the categories of work that will be available for DBE participation. The ARTBA noted that the DBE program requirements are still geared toward the traditional design-bid-build delivery process and that the increased use of alternative contracting techniques has precipitated apparent compliance gaps in the DBE program. The ARTBA stated that it is critical that FHWA provide clarity in exactly how DBE program compliance is to be harmonized with the CM/GC process as the latter evolves in use. The ARTBA indicated that uncertainty in this regard merely invites various agencies, or individual officials, to inject their own, unrelated policy priorities into the procurement process. As it relates to DBE compliance, the GCA and ARTBA believed that CM/GC projects should be treated like design-build projects where the contractor has some flexibility in identifying DBE commitments when submitting its technical and price proposals.

In response, FHWA agrees that CM/GC contracting presents a variation from the DBE selection process used in traditional design-bid-build projects. The FHWA recognizes ARTBA's concerns regarding potential DBE implementation issues on alternative contracting projects, but DBE policy revisions are best made through the rulemaking process for the DBE program. The FHWA believes that it is possible for the CM/GC contractor to provide the DBE documentation required by 49 CFR 26.53(b)(2) when the CM/GC contractor is providing its initial proposal for the construction services. There may be situations, however, where at this stage there is not sufficient detail (such as price, scope, and schedule) to provide the required DBE information. The FHWA has added language to the rule that will allow the CM/GC contractor to provide a contractually binding commitment at the time of initial proposal that will commit the contractor to meet the DBE contract goal if the contractor is awarded the construction services contract. This would give the CM/GC contractor time to provide the information required by 49 CFR 26.53(b)(2) before the contracting agency awards the contract. For example, CM/GC contractors may be able to gather and provide the required DBE documentation when the contracting agency and the CM/GC contractor enter into final price discussions because the level of design would be relatively high, and the scope and schedule would be defined so that risk and price can be assigned. This allowance is consistent with 49 CFR 26.53.(b)(3)(ii) for negotiated procurement situations.

The ITD stated that it is critical to use the term “agreement” when discussing preconstruction services and the term “contract” for the construction services. The FHWA appreciates this comment regarding Idaho's policy; however, we believe that the terms “agreement” and “contract” are used interchangeably for professional services. In addition, FHWA's regulations on “Procurement, Management, and Administration of Engineering and Design Related Services” (23 CFR 172) define a contract as a written procurement contract or agreement. For clarity, the terms “preconstruction services contract” and “construction services contact” will be used throughout this subpart. The term “agreement” will be reserved for agreements between FHWA and the STA.

The Connecticut DOT requested clarification of the requirement for FHWA approval of price estimates and project schedules for the entire project before authorization of construction services. The commenter expressed specific concern about situations which need to begin early work activities, such as building of temporary facilities and utility relocations, while the project's cost and/or schedule are still being refined. The commenter noted that, if the final rule retained the requirement as proposed, FHWA should appreciate that project costs and/or schedules may evolve and warrant subsequent review(s)/approval(s). In response, to the extent this comment relates to approval of a price estimate for the entire project before beginning construction services, FHWA addressed this issue in the discussion for section 635.506(d)(2). The requirement for FHWA to approve a price estimate for the entire project is a statutory requirement (23 U.S.C. 112 (b)(4)(C)(iii)). The references to agreed price, scope, and schedule in section 635.506(e) relate to the approval of those elements for each individual contract awarded as part of the overall CM/CG contract. Award approval reflects an underlying determination that procurement requirements, such price reasonableness, are satisfied and it is reasonable to award of the contract.

Section 635.507—Cost Eligibility

The Colorado DOT asked if the indirect cost rate provisions of section 635.507(b) applied to both preconstruction and construction contracts, and if the requirement applies to any other contracts besides cost-reimbursement contracts (e.g., lump sum, unit price, etc.).

In response, the requirement to use an approved indirect cost rate applies where payments for preconstruction services are based on actual costs (cost reimbursement contracts). Indirect cost rates do not apply in the construction services context, where actual cost work required due to unforeseen conditions is subject to applicable force account provisions.

The Michigan DOT noted that most construction contractors do not have an approved indirect cost rate. The Michigan DOT recommended, in the absence of an official indirect cost rate, a documented industry standard be used (e.g., a rate in the STA's Standard Specifications). The FHWA appreciates and understands the Michigan DOT comment, and the extent of the issue within the highway contracting community; however, if a contracting agency elects to use a payment method based on actual costs for preconstruction services, then it is necessary to ensure that the indirect cost rates comply with the Federal cost principles in 2 CFR 200 Subpart E.

The Connecticut DOT questioned the applicability of 2 CFR 200, Subpart E to CM/GC projects. The Connecticut DOT questioned the meaning and intent of the term “individual elements of costs” and asked for clarification if extra work is negotiated and an agreed upon price or cost plus is determined, could this extra work be seen as “negotiated based on individual elements of costs” and therefore also require indirect cost rates be established as part of its negotiations.

In response, the provisions of 2 CFR 200 apply to all Federal assistance programs such as the Federal-aid Highway Program. Unless there is a specific statutory exception, the requirements of 2 CFR 200 apply, including the “Cost Allowability” provisions of Subpart E. Regarding the use of the term “individual elements of costs,” the FHWA agrees that this term is not clear. The requirement for the use of indirect cost rates applies in cost-reimbursement type contracts. We agree that the NPRM language would benefit from a revision. We have changed the first sentence of section 635.507(b) to require the CM/GC contractor to provide an indirect cost rate established in accordance with the Federal cost principles when preconstruction service payments are based on actual costs. The FHWA notes that requirement is not applicable to competitive sealed bidding contracts that are typically bid on a lump sum or unit price basis. For competitive sealed bid contracts, the determination of price reasonableness is based on a price analysis (a comparison with the engineer's estimate or an independent cost estimate). For construction change order situations, where as a last resort, it is necessary to perform the construction work on an actual cost basis, the contracting agency may use its force account specifications as the basis for payment (23 CFR 635.120(d)).

Finally, as it relates to cost eligibility, the NYSDOT referenced two recent National Cooperative Highway Research Program studies that cited the use of an independent third party to prepare cost estimates for the purpose of evaluating the acceptability of the engineer estimate and CM/GC price proposals.3 The NYSDOT suggested that costs associated with the use of an independent estimator should be eligible for participation. The FHWA agrees. The use of an independent cost estimate is mentioned in section 635.506(d)(3) as an allowable activity. Experience to date has shown the independent cost estimate has been helpful in verifying price reasonableness. The preparation of an independent cost estimate falls within the statutory definition of “construction” in 23 U.S.C. 101(a)(4) as a preliminary engineering activity. The FHWA Division Office has the authority to make all decisions regarding cost eligibility based on whether a cost is necessary, reasonable, and allocable to a Federal-aid project consistent with the Cost Principals in 2 CFR part 200, subpart E. Given the contracting agency's objectives of verifying price reasonableness in the price analysis required by section 635.506(d)(3), the costs associated with the independent cost estimate are eligible for participation.

The FHWA considered all comments received before the close of business on the comment closing date indicated above, and the comments are available for examination in the docket (FHWA-2015-0009) at Regulations.gov. The FHWA also considered comments received after the comment closing date and filed in the docket prior to this final rule.

The FHWA determined that this rule does not constitute a significant regulatory action within the meaning of Executive Order 12866 or within the meaning of DOT regulatory policies and procedures. The amendments clarify and revise requirements for the procurement, management, and administration of engineering and design related services using Federal-Aid Highway Program (FAHP) funding and directly related to a construction project. Additionally, this action complies with the principles of Executive Order 13563. The changes to parts 630 and 635 provide additional clarification, guidance, and flexibility to stakeholders implementing these regulations. This rule is not anticipated to adversely affect, in any material way, any sector of the economy. In addition, these changes will not create a serious inconsistency with any other agency's action or materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. After evaluating the costs and benefits of these amendments, FHWA anticipates that the economic impact of this rule will be minimal; therefore, a full regulatory evaluation is not necessary.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (Public Law 96-354, 5 U.S.C. 601-612), FHWA evaluated the effects of this rule on small entities, such as local governments and businesses. The FHWA determined that this action would not have a significant economic impact on a substantial number of small entities. The amendments clarify and revise requirements for the procurement, management, and administration of engineering and design related services using FAHP funding and directly related to a construction project. After evaluating the cost of these proposed amendments, as required by changes in authorizing legislation, other applicable regulations, and industry practices, FHWA has determined the projected impact upon small entities which utilize FAHP funding for consultant engineering and design related services would be negligible. Therefore, FHWA certifies that the rule would not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

This final rule does not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Public Law 104-4, March 22, 1995, 109 Stat. 48). Furthermore, in compliance with the Unfunded Mandates Reform Act of 1995, FHWA evaluated this rule to assess the effects on State, local, and tribal governments and the private sector. This rule does not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $156 million or more in any one year (2 U.S.C. 1532). Additionally, the definition of “Federal Mandate” in the Unfunded Mandates Reform Act excludes financial assistance of the type in which State, local, or tribal governments have authority to adjust their participation in the program in accordance with changes made in the program by the Federal Government. The FAHP permits this type of flexibility.

Executive Order 13132 (Federalism Assessment)

This rule was analyzed in accordance with the principles and criteria contained in Executive Order 13132, dated August 4, 1999, and it was determined that this rule does not have a substantial direct effect or sufficient federalism implications on States that would limit the policymaking discretion of the States. Nothing in this rule directly preempts any State law or regulation or affects the States' ability to discharge traditional State governmental functions.

Paperwork Reduction Act

Federal agencies must obtain approval from the Office of Management and Budget for each collection of information they conduct, sponsor, or require through regulations. This rule does not contain a collection of information requirement for the purpose of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).

National Environmental Policy Act

Agencies must adopt implementing procedures for NEPA that establish specific criteria for, and identification of, three classes of actions: Those that normally require preparation of an EIS; those that normally require preparation of an EA; and those that are categorically excluded from further NEPA review (40 CFR 1507.3(b)). This action qualifies for an FHWA categorical exclusion under 23 CFR 771.117(c)(20) (promulgation of rules, regulations, and directives). The FHWA has evaluated whether the action would involve unusual circumstances or extraordinary circumstances and has determined that this action would not involve such circumstances. As a result, FHWA finds that this rule would not result in significant impacts on the human environment.

Executive Order 12898 (Environmental Justice)

Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, and DOT Order 5610.2(a) (the DOT Order), 91 FR 27534, May 10, 2012 (available at www.fhwa.dot.gov/enviornment/environmental_justice/ej_at_dot/order_56102a/index.cfm), require DOT agencies to achieve environmental justice (EJ) as part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects, including interrelated social and economic effects, of their programs, policies, and activities on minority populations and low-income populations in the United States. The DOT Order requires DOT agencies to address compliance with Executive Order 12898 and the DOT Order in all rulemaking activities. In addition, FHWA has issued additional documents relating to administration of Executive Order 12898 and the DOT Order. On June 14, 2012, FHWA issued an update to its EJ order, FHWA Order 6640.23A, FHWA Actions to Address Environmental Justice in Minority Populations and Low Income Populations (the FHWA Order) (available at www.fhwa.dot.gov/legsregs/directives/orders/664023a.htm).

The FHWA has evaluated this rule under the Executive Order, the DOT Order, and the FHWA Order and has determined that this rule would not cause disproportionately high and adverse human health and environmental effects on minority or low income populations.

Executive Order 13175 (Tribal Consultation)

The FHWA analyzed this rule under Executive Order 13175, dated November 6, 2000, and believes that this rule would not have substantial direct effects on one or more Indian tribes, would not impose substantial direct compliance costs on Indian tribal governments, and would not preempt tribal law. This rule establishes the requirements for the procurement, management, and administration of engineering and design related services using FAHP funding and directly related to a construction project. As such, this rule would not impose any direct compliance requirements on Indian tribal governments nor would it have any economic or other impacts on the viability of Indian tribes. Therefore, a tribal summary impact statement is not required.

Executive Order 13211 (Energy Effects)

The FHWA analyzed this rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use. We determined that this rule would not be a significant energy action under that order because any action contemplated would not be likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, FHWA certifies that a Statement of Energy Effects under Executive Order 13211 is not required.

Executive Order 12630 (Taking of Private Property)

The FHWA analyzed this rule and determined that this rule would not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

The FHWA analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks, and certifies that this action would not cause an environmental risk to health or safety that may disproportionately affect children.

Regulation Identifier Number

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

(8) For Construction Manager/General Contractor projects, the execution or modification of the project agreement for preconstruction services associated with final design and for construction services, and authorization to proceed with such services, shall not occur until after the completion of the NEPA process. However, preconstruction services associated with preliminary design may be authorized in accordance with this section.

PART 635—CONSTRUCTION AND MAINTENANCE3. Revise the authority citation for Part 635 to read as follows:Authority:

Construction Manager/General Contractor (CM/GC) project means a project to be delivered using a two-phase contract with a construction manager or general contractor for services during both the preconstruction and construction phases of a project.

(d) In the case of a CM/GC project, the requirements of subpart E and the appropriate provisions pertaining to the CM/GC method of contracting in this part will apply. However, no justification of cost effectiveness is necessary in selecting projects for the CM/GC delivery method.

(a) Except as provided in paragraph (b) of this section, the following changed conditions contract clauses shall be made part of, and incorporated in, each highway construction project, including construction services contracts of CM/GC projects, approved under 23 U.S.C. 106:

(j) In the case of a CM/GC project, the FHWA Division Administrator's approval of the solicitation document will constitute the FHWA's approval to use the CM/GC contracting method and approval to release the solicitation document. The STD must obtain the approval of the FHWA Division Administrator before issuing addenda which result in major changes to the solicitation document.

(p) In the case of a design-build or CM/GC project, the following certification requirements apply

(1) * * *

(vi) If the STD elects to include right-of-way, utility, and/or railroad services as part of the design-builder's or CM/GC contractor's scope of work, then the applicable design-build Request for Proposals document, or the CM/GC solicitation document must include:

(3) Changes to the design-build or CM/GC project concept and scope may require a modification of the transportation plan and transportation improvement program. The project sponsor must comply with the metropolitan and statewide transportation planning requirements in 23 CFR part 450 and the transportation conformity requirements (40 CFR parts 51 and 93) in air quality nonattainment and maintenance areas, and provide appropriate approval notification to the design builder or the CM/GC contractor for such changes.

The regulations in this subpart prescribe policies, requirements, and procedures relating to the use of the CM/GC method of contracting on Federal-aid projects.

§ 635.502 Definitions.

As used in this subpart:

Agreed price means the price agreed to by the Construction Manager/General Contractor (CM/GC) contractor and the contracting agency to provide construction services for a specific scope and schedule.

CM/GC contractor means the entity that has been awarded a two-phase contract for a CM/GC project and is responsible for providing preconstruction services under the first phase and, if a price agreement is reached, construction services under the second phase of such contract.

CM/GC project means a project to be delivered using a two-phase contract with a CM/GC contractor for services during the preconstruction and, if there is an agreed price, construction phases of a project.

Construction services means the physical construction work undertaken by a CM/GC contractor to construct a project or a portion of the project (including early work packages). Construction services include all costs to perform, supervise, and administer physical construction work. Construction services may be authorized as a single contract for the project, or through a combination of contracts covering portions of the CM/GC project.

Contracting agency means the State Transportation Agency (STA), and any State or local government agency, public-private partnership, or Indian tribe (as defined in 2 CFR 200.54) that is the acting under the supervision of the STA and is awarding and administering a CM/GC contract.

Division Administrator means the chief FHWA official assigned to conduct business in a particular State.

Early work package means a portion or phase of physical construction work (including but not limited to site preparation, structure demolition, hazardous material abatement/treatment/removal, early material acquisition/fabrication contracts, or any action that materially affects the objective consideration of alternatives in the NEPA review process) that is procured after NEPA is complete but before all design work for the project is complete. Contracting agencies may procure an early work package when construction risks have been addressed (both agency and CM/GC contractor risks) and the scope of work is defined sufficiently for the contracting agency and the CM/GC contractor to reasonably determine price. The requirements in § 635.506 (including § 635.506(d)(2)) and § 635.507 apply to procuring an early work package and FHWA authorization for an early work package.

Final design has the same meaning as defined in § 636.103 of this chapter.

NEPA process means the environmental review required under the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.), applicable portions of the NEPA implementing regulations at 40 CFR parts 1500-1508, and part 771 of this chapter.

Preconstruction services means consulting to provide a contracting agency and its designer with information regarding the impacts of design on the physical construction of the project, including but not limited to: Scheduling, work sequencing, cost engineering, constructability, cost estimating, and risk identification. Under a preconstruction services contract, the CM/GC contractor may provide consulting services during both preliminary and, subject to provisions in this subpart, final design. Such services may include on-site material sampling and data collection to assist the contacting agency's design team in its preliminary design work, but do not include design and engineering-related services as defined in § 172.3 of this chapter. The services may include the preparation of plans typically developed by a construction contractor during the construction phase (such as preliminary staging or preliminary falsework plans) when needed for the NEPA process. However, services involving plans or submittals that are considered elements of final design and not needed for the NEPA process (such as shop drawings or fabrication plans) is not allowed, even on an at-risk basis, prior to the completion of the NEPA review process.

Preliminary design has the same meaning as defined in section 636.103 of this title.

Solicitation document means the document used by the contracting agency to advertise the CM/GC project and request expressions of interest, statements of qualifications, proposals, or offers.

State transportation agency (STA) has the same meaning as the term State transportation department (STD) under § 635.102 of this chapter.

§ 635.503 Applicability.

The provisions of this subpart apply to all Federal-aid projects within the right-of-way of a public highway, those projects required by law to be treated as if located on a Federal-aid highway, and other projects which are linked to such projects (i.e., the project would not exist without another Federal-aid highway project) that are to be delivered using the CM/GC contractor method.

§ 635.504 CM/GC Requirements.

(a) In general. A contracting agency may award a two-phase contract to a CM/GC contractor for preconstruction and construction services. The first phase of this contract is the preconstruction services phase. The second phase is the construction services phase. The construction services phase may occur under one contract or under multiple contracts covering portions of the project, including early work packages.

(b) Procurement requirements. (1) The contracting agency may procure the CM/GC contract using applicable State or local competitive selection procurement procedures as long as those procedures do not serve as a barrier to free and open competition or conflict with applicable Federal laws and regulations.

(2) Contracting agency procedures may use any of the following solicitation options in procuring a CM/GC contract: Letters of interest, requests for qualifications, interviews, request for proposals or other solicitation procedures provided by applicable State law, regulation or policy. Single-phase or multiple-phase selection procedures may also be used.

(3) Contracting agency procedures shall require, at a minimum, that a CM/GC contract be advertised through solicitation documents that:

(iv) Identify whether interviews will be conducted before establishing the final rank (however, the contracting agency may reserve the right to make a final determination whether interviews are needed based on responses to the solicitation); and

(v) Include or reference sample contract form(s).

(4) If interviews are used in the selection process, the contracting agency must offer the opportunity for an interview to all short listed firms (or firms that submitted responsive proposals, if a short list is not used). Also, if interviews are used, then the contracting agency must not engage in conduct that favors one firm over another and must not disclose a firm's offer to another firm.

(5) A contracting agency may award a CM/GC contract based on qualifications, experience, best value, or any other combination of factors considered appropriate by the contracting agency and the Division Administrator and which are clearly specified in the solicitation documents.

(6) In the event that the contracting agency is unwilling or unable to enter into a contract with the CM/GC contractor for the construction services phase of the project (including any early work package), after the concurrence of the Division Administrator, the contracting agency may initiate a new procurement process meeting the requirements of subpart A of this part, or of another approved method for the affected portion of the construction work. If Federal-aid participation is being requested in the cost of construction, the contracting agency must request FHWA's approval before advertising for bids or proposals in accordance with § 635.112 and part 636 of this chapter. When the contracting agency makes a decision to initiate a new procurement, the contracting agency may determine that the CM/GC contractor is likely to have a competitive advantage that could adversely affect fair and open competition and not allow the CM/GC contractor to submit competitive bids.

(c) FHWA approval of CM/GC procedures. (1) The STA must submit its proposed CM/GC procurement procedures to the FHWA Division Administrator for review and approval. Any changes in approved procedures and requirements shall also be subject to approval by the Division Administrator. Other contracting agencies may follow STA approved procedures, or their own procedures if approved by both the STA and FHWA.

(2) The Division Administrator may approve procedures that conform to the requirements of this subpart and which do not, in the opinion of the Division Administrator, operate to restrict competition. The Division Administrator's approval of CM/GC procurement procedures may not be delegated or assigned to the STA.

(d) Subcontracting. Consistent with § 635.116(a), contracts for construction services must specify a minimum percentage of work (no less than 30 percent of the total cost of all construction services performed under the CM/GC contract, excluding specialty work) that a contractor must perform with its own forces. If required by State law, regulation, or administrative policy, the contracting agency may require the CM/GC contractor to competitively let and award subcontracts for construction services to the lowest responsive bidder.

(e) Payment methods. (1) The method of payment to the CM/GC contractor shall be set forth in the original solicitation documents, contract, and any contract modification or change order thereto. A single contract may contain different payment methods as appropriate for compensation of different elements of work.

(2) The methods of payment for preconstruction services shall be: Lump sum, cost plus fixed fee, cost per unit of work, specific rates of compensation, or other comparable payment method permitted in State law and regulation. When compensation is based on actual costs, an approved indirect cost rate must be used. The cost plus a percentage of cost and percentage of construction cost methods of payment shall not be used.

(3) The method of payment for construction services may include any method of payment authorized by State law (including, but not limited to, lump sum, unit price, and target price). The cost plus a percentage of cost and percentage of construction cost methods of payment shall not be used.

§ 635.505 Relationship to the NEPA process.

(a) In procuring a CM/GC contract before the completion of the NEPA process, the contracting agency may:

(1) Issue solicitation documents;

(2) Proceed with the award of a CM/GC contract providing for preconstruction services and an option to enter into a future contract for construction services once the NEPA review process is complete;

(3) Issue notices to proceed to the CM/GC contractor for preconstruction services, excluding final design-related activities; and

(4) Issue a notice-to-proceed to a consultant design firm for the preliminary design and any work related to preliminary design of the project to the extent that those actions do not limit any reasonable range of alternatives.

(b) The contracting agency shall not initiate construction activities (even on an at-risk basis) or allow such activities to proceed prior to the completion of the NEPA process. The contracting agency shall not perform or contract for construction services (including early work packages of any kind) prior to the completion of the NEPA process.

(c) A contracting agency may proceed, solely at the risk and expense of the contracting agency, with design activities at any level of detail, including final design and preconstruction services associated with final design, for a CM/GC project before completion of the NEPA process without affecting subsequent approvals required for the project. However, FHWA shall not authorize final design activities and preconstruction services associated with final design, and such activities shall not be eligible for Federal funding as provided in § 635.506(c), until after the completion the NEPA process. A contracting agency may use a CM/GC contractor for preconstruction services associated with at-risk final design only if the contracting agency has a procedure for segregating the costs of the CM/GC contractor's at-risk work from preconstruction services eligible for reimbursement during the NEPA process. If a contracting agency decides to perform at-risk final design, it must notify FHWA of its decision to do so before undertaking such activities.

(d) The CM/GC contract must include termination provisions in the event the environmental review process does not result in the selection of a build alternative. This termination provision is in addition to the termination for cause or convenience clause required by Appendix II to 2 CFR part 200.

(e) If the contracting agency expects to use information from the CM/GC contractor in the NEPA review for the project, then the contracting agency is responsible for ensuring its CM/GC contract gives the contracting agency the right to obtain, as needed, technical information on all alternatives analyzed in the NEPA review.

(f) The CM/GC contract must include appropriate provisions ensuring no commitments are made to any alternative during the NEPA process, and that the comparative merits of all alternatives identified and considered during the NEPA process, including the no-build alternative, will be evaluated and fairly considered.

(g) The CM/GC contractor must not prepare NEPA documentation or have any decisionmaking responsibility with respect to the NEPA process. However, the CM/GC contractor may be requested to provide information about the project and possible mitigation actions, including constructability information, and its work product may be considered in the NEPA analysis and included in the record.

(h) Any contract for construction services under a CM/GC contract must include appropriate provisions ensuring that all environmental and mitigation measures identified in the NEPA documentation and committed to in the NEPA determination for the selected alternative will be implemented, excepting only measures the contracting agency expressly describes in the CM/GC contract as excluded because they are the responsibility of others.

§ 635.506 Project approvals and authorizations.

(a) In general. (1) Under 23 U.S.C. 106(c), the States may assume certain FHWA responsibilities for project design, plans, specifications, estimates, contract awards, and inspections. Any individual State's assumption of FHWA responsibilities for approvals and determinations for CM/GC projects, as described in this subpart, will be addressed in the State's FHWA/STA Stewardship and Oversight Agreement. The State may not further delegate or assign those responsibilities. If an STA assumes responsibility for an FHWA approval or determination contained in this subpart, the STA will include documentation in the project file sufficient to substantiate its actions and to support any request for authorization of funds. The STA will provide FHWA with the documentation upon request.

(3) In accordance with 23 U.S.C. 106(c), States may assume FHWA review or approval responsibilities for §§ 635.504(b)(6) (approval of bidding), 635.504(e)(3) (approval of indirect cost rate), 635.506(b) (approval of preconstruction price and cost/price analysis), 635.506(d)(2) (approval of price estimate for entire project), 635.506(d)(4) (approval of construction price analysis for each construction services contract), and 635.506(e) (approval of preconstruction services and construction services contract awards) for CM/GC projects on the National Highway System, including projects on the Interstate System, and must assume such responsibilities for projects off the National Highway System unless the State determines such assumption is not appropriate.

(2) Before authorizing pre-construction services by the CM/GC contractor, the Division Administrator must review and approve the contracting agency's cost or price analysis for the preconstruction services procurement (including contract modifications). A cost or price analysis is encouraged but not required for procurements less than the simplified acquisition threshold in 2 CFR 200.88. The requirements of this paragraph apply when the contracting agency is requesting Federal assistance in the cost of preconstruction services.

(c) Final design during NEPA process. (1) If the contracting agency proceeds with final design activities, including CM/GC preconstruction services associated with final design activities, at its own expense before the completion of the NEPA process, then those activities for the selected alternative may be eligible for Federal reimbursement after the completion of the NEPA process so long as the Division Administrator finds that the contracting agency's final design-related activities:

(i) Did not limit the identification and fair evaluation of a reasonable range of alternatives for the proposed project;

(ii) Did not result in an irrevocable commitment by the contracting agency to the selection of a particular alternative;

(iii) Did not have an adverse environmental impact; and

(iv) Are necessary and reasonable and adequately documented.

(2) If, during the NEPA process, the Division Administrator finds the final design work limits the fair evaluation of alternatives, irrevocably commits the contracting agency to the selection of any alternative, or causes an adverse environmental impact, then the Division Administrator shall require the contracting agency to take any necessary action to ensure the integrity of the NEPA process regardless of whether or not the contracting agency wishes to receive Federal reimbursement for such activities.

(d) Construction services approvals and authorizations. (1) Subject to the requirements in § 635.505, the contracting agency may request Federal participation in the construction services costs associated with a CM/GC construction project, or portion of a project (including an early work package). In such cases, FHWA's construction contracting requirements will apply to all of the CM/GC project's construction contracts if any portion (including an early work package) of the CM/GC project construction is funded with title 23 funds. Any expenses incurred for construction services before FHWA authorization shall not be eligible for reimbursement except as may be determined in accordance with § 1.9 of this chapter.

(2) The Division Administrator must approve the price estimate for construction costs for the entire project before authorization of construction services (including authorization of an early work package).

(3) The contracting agency must perform a price analysis for any contract (or contract modification) that establishes or revises the scope, schedule or price for the construction of the CM/GC project or a portion of the project (including an early work package). The price analysis must compare the agreed price with the contracting agency's engineer's estimate or an independent cost estimate (if required by the contracting agency). A price analysis is encouraged but not required for procurements less than the simplified acquisition threshold in 2 CFR 200.88.

(4) The Division Administrator must review and approve the contracting agency's price analysis and agreed price for the construction services of a CM/GC project or a portion of the project (including an early work package) before authorization of construction services.

(5) Where the contracting agency and the CM/GC contractor agree on a price for construction services that is approved under paragraph (d)(4) of this section, FHWA's authorization of construction services will be based on the approved agreed price for the project or portion of the project. The authorization may include authorization of an early work package, including the advanced acquisition of materials consistent with § 635.122 and this subpart. In the event that construction materials are acquired for a CM/GC project but not installed in the CM/GC project, the cost of such material will not be eligible for Federal-aid participation. In accordance with § 635.507 and 2 CFR part 200, FHWA may deny eligibility for part or all of an early work package if such work is not needed for, or used for, the project.

(e) Contract award. The award of a Federal-aid CM/GC contract for preconstruction services and the award of contract(s) for construction services require prior concurrence from the Division Administrator. The concurrence is a prerequisite to authorization of preconstruction and construction services (including authorization for an early work package). Concurrence in the CM/GC contract award for construction services constitutes approval of the agreed price, scope, and schedule for the work under that contract. Where the contracting agency has established a Disadvantaged Business Enterprise (DBE) contract goal for the CM/GC construction services contract, the initial proposal for CM/GC construction services must include the DBE documentation required by 49 CFR 26.53(b)(2), or it must include a contractually binding commitment to meet the DBE contract goal, with the information required by 49 CFR 26.53(b)(2) provided before the contracting agency awards the contract for construction services. A copy of the executed contract between the contracting agency and the CM/GC contractor, including any contract for construction services, shall be furnished to the Division Administrator as soon as practical after execution. If the contracting agency decides not to proceed with the award of a CM/GC construction services contract, then it must notify the FHWA Division Administrator as provided in § 635.504(b)(6).

§ 635.507 Cost eligibility.

(a) Costs, or prices based on estimated costs, under a CM/GC contract shall be eligible for Federal-aid reimbursement only to the extent that costs incurred, or cost estimates included in negotiated prices, are allowable in accordance with the Federal cost principles (as specified in 2 CFR part 200, subpart E). Contracting agencies must perform a cost or price analysis in connection with procurement actions, including contract modifications, in accordance with 2 CFR 200.323(a) and this subpart.

(1) For preconstruction services, to the extent that actual costs or cost estimates are included in negotiated prices that will be used for cost reimbursement, the costs must comply with the Federal cost principles to be eligible for participation.

(2) For construction services, the price analysis must confirm the agreed price is reasonable in order to satisfy cost eligibility requirements (see § 635.506(d)(3)). The FHWA will rely on an approved price analysis when authorizing funds for construction.

(b) Indirect cost rates. Where preconstruction service payments are based on actual costs the CM/GC contractor must provide an indirect cost rate established in accordance with the Federal cost principles (as specified in 2 CFR part 200 subpart E).

(c) Cost certification. (1) If the CM/GC contractor presents an indirect cost rate established in accordance with the Federal cost principles (as specified in 2 CFR part 200 subpart E), it shall include a certification by an official of the CM/GC contractor that all costs are allowable in accordance with the Federal cost principles.

(2) An official of the CM/GC contractor shall be an individual executive or financial officer of the CM/GC contractor's organization, at a level no lower than a Vice President or Chief Financial Officer, or equivalent, who has the authority to make representations about the financial information utilized to establish the indirect cost rate proposal submitted.

(3) The certification of final indirect costs shall read as follows:

Certificate of Final Indirect Costs

This is to certify that I have reviewed this proposal to establish final indirect cost rates and to the best of my knowledge and belief:

1. All costs included in this proposal (identify proposal and date) to establish final indirect cost rates for (identify period covered by rate) are allowable in accordance with the cost principles in 2 CFR part 200 subpart E; and

2. This proposal does not include any costs which are expressly unallowable under applicable cost principles of 2 CFR part 200 subpart E.

Office of the Assistant Secretary for Community Planning and Development, HUD.

ACTION:

Interim final rule.

SUMMARY:

This rule changes the method by which HUD will determine participating jurisdictions' compliance with the statutory 24-month commitment requirement. Beginning with Fiscal Year (FY) 2015 grants, HUD will implement a grant-specific method for determining compliance with these requirements. This rule also establishes a method of administering program income that will prevent participating jurisdictions from losing appropriated funds when they expend program income.

DATES:

Effective Date: January 31, 2017.

Comment Due Date: January 3, 2017.

ADDRESSES:

Interested persons are invited to submit comments regarding this interim final rule. All communications must refer to the above docket number and title. To receive consideration as public comments, comments must be submitted through one of the two methods specified below:

1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500.

2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

No Facsimiled Comments. Facsimiled (faxed) comments are not acceptable.

Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number). Copies of all comments submitted are available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Virginia Sardone, Director, Office of Affordable Housing Programs, Department of Housing and Urban Development, Office of Community Planning and Development, 451 7th Street SW., Suite 7286, Washington, DC 20410; or at 202-708-2684 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

Section 218(g) of the National Affordable Housing Act of 1990 (NAHA), as amended, requires that participating jurisdictions place Home Investment Partnerships Program (HOME) funds under binding commitment within 24 months after the last day of the month in which HUD made the funds available (i.e., obligated the grant by executing the HOME grant agreement). This section of NAHA further states that a participating jurisdiction loses the right to draw any funds that are not placed under binding commitment by that date and that HUD shall reduce the participating jurisdiction's line of credit by the expiring amount.

To date, HUD has measured compliance with the HOME program 24-month requirement for committing funds using a cumulative methodology. Because HUD's Integrated Disbursement and Information System (IDIS) committed and disbursed funds on a first-in, first-out basis through participating jurisdictions' FY 2014 HOME grants, participating jurisdictions did not have the ability to designate funds from a specific allocation when committing HOME funds to a project. Consequently, HUD implemented the commitment requirement through a cumulative methodology under which HUD determined a participating jurisdiction's compliance with the 24-month deadline by determining whether the total amount committed by the participating jurisdiction from all HOME grants it had received was equal to or greater than the participating jurisdiction's cumulative commitment requirement for all grants that had been obligated for 24 months or longer. This methodology has been described in the HOME program regulations since 1997.

HUD will begin using a grant-specific method of determining compliance with the 24-month commitment deadline, beginning with FY 2015 HOME grants. HUD has made changes to IDIS so that, beginning with FY 2015 grants, the participating jurisdiction will select the grant year's funds that will be committed to a specific project or activity. When the participating jurisdiction requests a draw of grant funds for that project or activity, HUD, through IDIS, will disburse the funds committed to that project or activity, rather than the oldest funds available.

As mentioned above, prior to this change, IDIS did not permit participating jurisdictions to specify which grant years' funds they were committing to a specific project. This system change makes it possible for participating jurisdictions to commit funds and for HUD to assess commitment deadline compliance on a grant-specific basis, beginning with FY 2015 HOME grants.

HOME program regulatory changes are also needed to address the timely commitment and expenditure of program income, repaid funds, recaptured funds, and funds committed for programs to be administered by State recipients and subrecipients. Conforming changes to the consolidated plan regulations with respect to program income, repaid funds, and recaptured funds are also made.

The following section of this preamble provides a section-by-section overview of the interim regulatory changes.

HUD has revised the regulations governing the HOME program components of the action plans for local governments (§ 91.220) and States (§ 91.320). Specifically, this rule revises sections § 91.220(l)(2)(i) and § 91.320(k)(2)(i) to require the participating jurisdiction to include uncommitted program income, repayments, and recaptured funds that it has received during the previous year in the resources it describes in its annual action plan. The rule gives participating jurisdictions the option to include program income, repayments, or recaptures expected to be received during the program year in the summary of anticipated Federal resources described in their annual action plan. Participating jurisdictions are not required to include these anticipated funds in their action plan, because doing so would result in them having a period of less than 24 months to commit these funds. However, if a participating jurisdiction did not include anticipated program income, repayments, or recaptured funds in the annual action plan and later wished to commit such funds to a HOME project or activity, it would be required to amend its annual action plan, in accordance with the provisions of § 91.505.

Definitions (§ 92.2)

This rule eliminates reference to an agreement with a contractor from the definition of “commitment” in § 92.2. Unlike State recipients and subrecipients, which design programs and develop policies and procedures to administer those programs, contractors that administer HOME-funded programs carry out the participating jurisdiction's policies and procedures. When a participating jurisdiction carries out HOME activities using its own employees, HOME funds are committed when the participating jurisdiction executes an agreement with a project owner to assist a specific project. When a participating jurisdiction uses contractors in place of its own employees to carry out activities, the agreement with those contractors should not constitute a commitment.

HUD has added language to the definition clarifying that community housing development organization (CHDO) operating expense funds, CHDO capacity building funds, and CHDO project-specific technical assistance and site control loans are considered committed when the participating jurisdiction executes a legally binding agreement for the use of the funds. Similarly, the rule includes language clarifying that administrative and planning cost funds are considered committed based on the amount set aside for such purposes in IDIS. These revisions reflect HUD's longstanding practice of considering these three types of CHDO funds, each of which is designated as a unique fund type in IDIS, as committed based upon legally binding written agreements for the activities and make the regulatory definition of “commitment” comprehensive.

HOME Investment Trust Fund (§ 92.500)Commitment Deadline

This rule revises § 92.500(d). Currently, 24 CFR 92.500(d)(1) describes the requirements for reducing a participating jurisdiction's grant for failure to meet the 24-month commitment deadline, the 24-month deadline for committing 15 percent of a HOME allocation for CHDO set-aside projects, and the 5-year deadline for expending HOME funds. Section 92.500(d)(2) then describes the cumulative method for determining compliance with the deadlines outlined in paragraph (d)(1) of § 92.500. This rule reorganizes these paragraphs so that § 92.500(d)(1) addresses commitment, CHDO set-aside commitment, and expenditure requirements for FY 2015 and subsequent-year HOME allocations and § 92.500(d)(2) addresses these requirements for FY 2014 and prior-year HOME allocations.

At § 92.500(d)(1)(i), this rule requires that HUD recapture any funds (including funds for CHDOs under § 92.300) from a specific grant allocation that are in the participating jurisdiction's United States Treasury Account and are not committed within 24 months of the last day of the month in which HUD notifies the participating jurisdiction of HUD's execution of the HOME Investment Partnership Agreement for the specific fiscal year allocation. Participating jurisdictions will no longer have flexibility to meet the requirement that 15 percent of its HOME allocation be used for housing owned, developed, or sponsored by CHDOs on a cumulative basis (e.g., committing less than 15 percent to CHDOs in some years and more than 15 percent to CHDOs in others, but maintaining compliance by ensuring that 15 percent of cumulative HOME allocations are used for CHDO projects). Each participating jurisdiction is now required to commit a minimum of 15 percent of each year's allocation or HUD will recapture the funds.

The rule at § 92.500(d)(1)(ii) establishes a new deadline to ensure that funds that have been committed to State recipients or subrecipients are subsequently committed timely to a specific local project. HOME funds that a participating jurisdiction committed to a State recipient or subrecipient must be committed to a specific local project within 36 months after the last day of the month in which HUD notified the participating jurisdiction of HUD's execution of its HOME Investment Partnership Agreement for the specific fiscal year allocation. HUD has established this deadline because, with the elimination of the 5-year expenditure deadline described below, HOME funds committed to a State recipient or subrecipient could remain uncommitted to a project until the expiration of the funds at the end of 9 years, at which point they would be recaptured. The additional deadline is necessary to ensure that HOME funds that have been committed to State recipients or subrecipients are committed to projects within a reasonable period of time.

For FY 2014 and previous grants, HUD will continue using the cumulative method for determining compliance with the commitment deadline. Participating jurisdictions have relied on the existing HOME regulations at § 92.500(d)(2) and the HOME Deadline Compliance reports that HUD has posted monthly on its HOME program Web site 1 since 2005, which describe and implement the cumulative method of determining compliance with the HOME commitment, CHDO commitment, and expenditure deadlines. However, HUD has eliminated the existing § 92.500(d)(2) and added new text to fully explain the cumulative methodology that will continue to apply to FY 2014 and previous grants. A new paragraph (d)(2)(i)(A) in § 92.500 establishes the 24-month commitment requirement for FY 2014 and previous HOME allocations, including the 15 percent CHDO reservation requirement. New paragraph (d)(2)(i)(B) describes the cumulative method that HUD will continue to use to measure compliance with the 24-month commitment deadlines for these grants. New paragraph (d)(2)(i)(C) retains existing regulatory language stating that HUD may recapture HOME funds for any penalties assessed by HUD under § 92.552 (Sanctions).

1 HUD's HOME program Web site is located at http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/affordablehousing/programs/home.

New paragraph § 92.500(d)(2)(iii) requires FY 2014 and previous allocations to be committed by the participating jurisdiction's deadline for FY 2015 allocations. For deadlines occurring in 2016 for FY 2014 HOME allocations, HUD is following the existing regulation and using the cumulative method for determining compliance with the 24-month commitment requirement. As a result, it was necessary to include commitments from FY 2015 allocations in the cumulative calculation of commitments, creating a situation in which FY 2014 and earlier funds would not be separately subject to any commitment requirement.

Expenditure Deadline

In this rule, HUD has eliminated the 5-year deadline for expenditure of HOME funds appropriated for FY 2015 and subsequent years. This regulatory deadline was established in the December 16, 1991, interim rule (56 FR 65313) issued to implement the HOME statute. At that time, funds appropriated for the HOME program were available until expended and HUD determined that it was necessary to establish a deadline to ensure that HOME funds were expended expeditiously to develop affordable housing. Beginning with the FY 2002 HOME appropriation, and for all subsequent appropriations, funds appropriated for the HOME program are available for obligation to participating jurisdictions for 3 years after the first day of the fiscal year for which they were appropriated and expire 5 years after the period of obligation (i.e., at the end of the eighth year). Expired funds are recaptured by the United States Treasury. HUD's FY 2015 and FY 2016 appropriations laws have extended the period of obligation of HOME funds to 4 years; the funds expire 5 years after the period of obligation (i.e., at the end of the ninth year). In addition, in 2013, HUD established a 4-year deadline for completing projects assisted with HOME funds in § 92.205(e)(2). Because of these new deadlines for expiration of appropriated funds and completion of projects, HUD believes that the 5-year expenditure deadline is duplicative and creates an unnecessary burden on participating jurisdictions. Thus, the deadline is eliminated.

This rule also eliminates the separate 5-year deadline for expenditure of CHDO set-aside funds appropriated for FY 2015 and subsequent years. In its 2013 HOME rulemaking, HUD determined that a separate examination of CHDO expenditures was necessary because, under the cumulative method of determining compliance with the 5-year expenditure requirement, rapid expenditure of other HOME funds frequently shielded older, unexpended CHDO funds from deobligation. This separate deadline is no longer necessary and this rule eliminates both the overall and the CHDO-specific 5-year deadlines for expending HOME funds.

Expiration of Funds

For clarity, HUD has included the 9-year deadline for the expiration of HOME funds in § 92.500(d)(2)(iii)(C). The new provision states that HUD will recapture funds from a specific fiscal year allocation that are in the United States Treasury account and are not expended by the end of the fifth year after the period of availability for obligation by HUD. These funds will be deobligated from the participating jurisdiction and returned to the United States Treasury.

Program Disbursement and Information System (§ 92.502)

This rule eliminates § 92.502(b)(2), which contained two provisions related to HUD cancellation of projects. The first provision stated that HUD's information system could cancel a project for which project set-up information was not completed within 20 days. This provision is not necessary, because IDIS does not permit project set up to occur until all required information has been entered. The second provision permitted HUD to automatically cancel projects that had been committed in IDIS for 12 months without an initial disbursement of funds. HUD will continue to monitor projects for timely initial disbursement of funds. However, the automatic cancellation of projects by IDIS is no longer appropriate because it may result in the loss of funds that become uncommitted after the 24-month commitment deadline irrespective of the nature and extent of any project delay.

The rule revises § 92.502(c)(3) to add language stating that, beginning with FY 2015 allocations, the specific funds that are committed to a project will be disbursed for that project. This provision is necessary because, beginning with FY 2015 HOME grants, IDIS no longer disburses funds on a first-in, first-out basis. HUD also adds language to this paragraph stating that if funds in both the HOME local account and in the United States Treasury account are committed to a HOME project, the funds in the local account must be disbursed before the participating jurisdiction requests that HOME funds be disbursed from the United States Treasury account. This provision ensures that program income and other HOME funds in the local account are disbursed before HOME funds are drawn from the Treasury.

Program Income, Repayments, and Recaptured Funds (§ 92.503)

HUD has revised paragraphs § 92.503(b)(2) and (3) so that participating jurisdictions that must repay HOME funds for any reason must seek HUD's instructions with respect to the account to which the HOME funds must be repaid. By providing specific instructions on a case-by-case basis, HUD can avoid situations in which a participating jurisdiction repays funds to a Federal HOME account after the 24-month deadline and loses access to the funds as a result.

Under the first-in, first-out method of disbursing funds, it was generally not necessary for participating jurisdictions to commit program income and other funds in the local HOME account through IDIS prior to expending the funds. When a participating jurisdiction had program income on hand, it, generally, disbursed program income for the next HOME cost. Since 2007, HUD has excluded expended HOME program income from the calculation of total commitments or expenditures for determining compliance with the 24-month commitment and the 5-year expenditure deadlines.

This rule changes the manner in which program income and other funds in the local HOME account are treated. Otherwise, a participating jurisdiction would be required to uncommit appropriated HOME funds from a specific project each time it disbursed program income for that project. This would then subject the newly uncommitted HOME funds to recapture by HUD if the 24-month commitment deadline for those funds had passed. To avoid unnecessary loss of funds, HUD has determined that participating jurisdictions should be permitted to accumulate program income, repayments, and recaptured funds during a program year and that a deadline for committing HOME funds should be applied to those funds in the local account. Although participating jurisdictions are required to include program income expected to be received in their consolidated plan or annual action plans, HUD recognizes that participating jurisdictions cannot always accurately estimate the amount and timing of program income, recaptures, or repaid funds that they may receive. Consequently, to accommodate the unpredictability associated with the receipt of program income, HUD has established special provisions with respect to program income.

The rule adds a new § 92.503(d) to establish a deadline for committing funds deposited in a participating jurisdiction's local HOME account. These funds include program income as defined at § 92.2, repayments of HOME funds pursuant to § 92.503(b), and recaptured funds as described in § 92.503(c). HUD has determined it is necessary to establish this deadline because, under the new requirements for committing funds from specific allocations, funds in the local account will have to be committed to specific projects before they can be expended. The deadline for committing program income, repayments, and recaptured funds received during a program year is the same as the commitment deadline for the HOME grant allocation for the subsequent program year. HUD has determined that this approach is appropriate because: (1) The deadline for committing program income should not be shorter than for appropriated funds, and, unlike appropriated funds, program income, repayments, and recaptured funds are received sporadically throughout the year; and (2) it would be administratively burdensome for participating jurisdictions to track and comply with two separate deadlines each year for committing their HOME allocation and funds in their local account. Further, while the amount and approximate date of receipt for program income can often be estimated by a participating jurisdiction, repaid funds and recaptured funds generally cannot be anticipated in advance.

This rule adds new paragraphs at § 92.504(c)(7) and (8) to establish the requirements for written agreements for CHDO project-specific technical assistance, site control loans, project-specific seed money loans, and community development capacity building activities. These provisions are added to correspond to the addition of these agreements to the definition of “commitment” at § 92.2.

III. Justification for Interim Rule

HUD generally publishes rules for advance public comment in accordance with its rule on rulemaking at 24 CFR part 10. However, under 24 CFR 10.1, HUD may omit prior public notice and comment if it is “impracticable, unnecessary, or contrary to the public interest.” In this instance, HUD has determined that it is unnecessary to delay the effectiveness of this rule for advance public comment.

The HOME statute requires that HOME funds be placed under legally binding agreement within 24 months of HUD's obligation of the HOME grant to the participating jurisdiction. As described in the HOME regulations at 24 CFR 92.500(d)(2), since 1997 HUD has determined compliance with the commitment requirement by comparing cumulative commitments through the deadline date to the cumulative amount of HOME funds required to have been committed as of that date.

Beginning in 2013, HUD has frequently discussed with HOME participating jurisdictions the planned change from the cumulative method of measuring commitment compliance to a grant-specific method as part of HUD's transition to grant-based accounting for its formula grant programs. HUD notified all HOME participating jurisdictions of the planned IDIS programming changes to implement grant-specific commitment deadline compliance for FY 2015 HOME grants.2

HUD has also conducted webinars to explain the pending changes in the method for determining compliance with the commitment deadline beginning with FY 2015 HOME grants.3 During 2015 and 2016, HUD provided HOME grant-based accounting training at numerous HOME conferences sponsored by membership associations for HOME participating jurisdictions and at meetings hosted by HUD field offices across the country.

The scope of the rule amendments is limited to this change and to other changes that: (1) Conform the regulations to the new method or make minor corrections and clarifications of provisions relating to commitments and the written agreements through which HOME funds are committed; (2) eliminate the expenditure deadline and automatic project cancellation provisions that are no longer required under the grant-specific method of committing and expending funds, or which may otherwise help to minimize undue risk of HOME funding deobligations; and (3) establish a project commitment deadline for funds provided to State recipients and subrecipients to ensure timely deployment of funds for affordable housing projects.

With the exception of the new requirements related to program income, this rule does not establish new and unfamiliar requirements for HOME participating jurisdictions. Moreover, if HUD were to issue this rule without adjusting the program income requirements, HOME participating jurisdictions could potentially lose millions of dollars of appropriated HOME funds each time they expended program income while HUD conducted proposed and final rulemaking processes. Consequently, the program income changes are included in the rule because they help to avert the loss of large amounts of HOME funds by the communities and beneficiaries for which they were appropriated.

Although HUD has determined that good cause exists to publish this rule for effect without prior solicitation of public comment, HUD recognizes the value and importance of public input in the rulemaking process. Accordingly, HUD is issuing these regulatory amendments on an interim basis and providing a 60-day public comment period. HUD is specifically soliciting comment on the best way to treat program income to avoid loss of appropriated HOME funds. All comments will be considered in the development of the final rule.

IV. Findings and CertificationsInformation Collection Requirements

In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid Office of Management and Budget (OMB) control number. The information collection requirements contained in this rule have been submitted to OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2506-0171.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule will not impose any Federal mandates on any State, local, or tribal governments or the private sector within the meaning of UMRA.

Environmental Review

A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations in 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available for public inspection during regular business hours in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500, and is also available to view on www.regulations.gov. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the FONSI by calling the Regulations Division at (202) 708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at (800) 877-8339 (this is a toll-free number).

Impact on Small Entities

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. As discussed, this regulation changes the manner in which HUD measures compliance with the statutory 24-month commitment deadline in the HOME program and does not alter the manner in which participating jurisdictions administer their HOME programs. Given this fact, HUD anticipates the regulatory changes will have minimal, or no, economic impacts.

Therefore, the undersigned certifies that this rule will not have a significant impact on a substantial number of small entities.

Notwithstanding HUD's belief that this rule will not have a significant effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.

Executive Order 13132, Federalism

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on State and local governments and is not required by statute or the rule preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments nor preempt State law within the meaning of the Executive order.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance number applicable to the program that would be affected by this rule is 14.239.

List of Subjects24 CFR Part 91

Aged, Grant programs-housing and community development, Homeless, Individuals with disabilities, Low and moderate income housing, Reporting and recordkeeping requirements.

2. In § 91.220, redesignate paragraphs (l)(2)(i) through (vii) as (l)(2)(ii) through (viii), and add new paragraph (l)(2)(i) to read as follows:§ 91.220 Action plan.

(l) * * *

(2) * * *

(i) The HOME program resources that the participating jurisdiction must describe in the action plan are the fiscal year HOME allocation plus the amount of program income, repayments, and recaptured funds in the participating jurisdiction's HOME Investment Trust Fund local account (see 24 CFR 92.500(c)(1)) at the beginning of the participating jurisdiction's program year. The jurisdiction may choose to include program income, repayments, and recaptured funds that are expected to be received during the program year if the jurisdiction plans to commit these funds during the program year.

3. In § 91.320, redesignate paragraphs (k)(2)(i) through (vii) as paragraphs (k)(2)(ii) through (viii), and add new paragraph (k)(2)(i) to read as follows.§ 91.320 Action plan.

(k) * * *

(2) * * *

(i) The HOME program resources that the State must describe in the action plan are the fiscal year HOME allocation plus the amount of program income, repayments, and recaptured funds in the State's HOME Investment Trust Fund local account (see 24 CFR 92.500(c)(1)) at the beginning of the State's program year. The State may choose to include program income, repayments, and recaptured funds that are expected to be received during the program year if the State plans to commit these funds during the program year.

(2) To carry out an activity, using funds from any program covered by the consolidated plan (including program income, reimbursements, repayment, recaptures, or reallocations from HUD), not previously described in the action plan; or

PART 92—HOME INVESTMENT PARTNERSHIPS PROGRAM5. The authority citation for part 92 continues to read as follows:Authority:

42 U.S.C. 3535(d) and 12701-12839.

6. In § 92.2, revise paragraph (1) of the definition of “Commitment” to read as follows:§ 92.2 Definitions.

Commitment means:

(1) The participating jurisdiction has executed a legally binding written agreement (that includes the date of the signature of each person signing the agreement) that meets the minimum requirements for a written agreement in § 92.504(c). An agreement between the participating jurisdiction and a subrecipient that is controlled by the participating jurisdiction (e.g., an agency whose officials or employees are official or employees of the participating jurisdiction) does not constitute a commitment. An agreement between the representative unit and a member unit of general local government of a consortium does not constitute a commitment. Funds for administrative and planning costs of the HOME program are committed based on the amount in the program disbursement and information system for administration and planning. The written agreement must be:

(i) With a State recipient or a subrecipient to use a specific amount of HOME funds to produce affordable housing, provide downpayment assistance, or provide tenant-based rental assistance;

(ii) With a community housing development organization to provide operating expenses;

(iii) With a community housing development organization to provide project-specific technical assistance and site control loans or project-specific seed money loans, in accordance with § 92.301;

(iv) To develop the capacity of community housing development organizations in the jurisdiction, in accordance with § 92.300(b); or

(v) To commit to a specific local project, as defined in paragraph (2) of this definition.

(d)(1) Reductions of Fiscal Year 2015 and subsequent fiscal year allocations. HUD will reduce or recapture HOME funds in the HOME Investment Trust Fund, as follows:

(i) Any funds from a specific fiscal year allocation that are in the United States Treasury account that are not committed (including funds for community housing development organizations under § 92.300) within 24 months after the last day of the month in which HUD notifies the participating jurisdiction of HUD's execution of the HOME Investment Partnership Agreement for the specific fiscal year allocation;

(ii) Any funds from a specific fiscal year allocation that were committed to a State recipient or subrecipient that are not committed to a specific local project within 36 months after the last day of the month in which HUD notifies the participating jurisdiction of HUD's execution of the HOME Investment Partnership Agreement for the specific fiscal year allocation;

(iii) Any funds from a specific fiscal year allocation that are in the United States Treasury account that are not expended (drawn down) by September 30 of the fifth year after the end of the period of availability of the fiscal year allocation for obligation by HUD. Due to end-of-year financial system closeouts that begin before this date and prevent electronic access to the payment system, requests to draw down the funds must be made at least 7 full business days before this date to ensure that the funds still can be drawn from the United States Treasury account through the computerized disbursement and information system; and

(iv) Any penalties assessed by HUD under § 92.552.

(2)(i) Reductions of Fiscal Year 2014 and prior fiscal year allocations. HUD will reduce or recapture HOME funds in the HOME Investment Trust Fund by the amount of:

(A) Any funds from Fiscal Year 2014 and prior fiscal year allocations in the United States Treasury account that are required to be reserved (i.e., 15 percent of the funds) by a participating jurisdiction, under § 92.300, and which are not committed to a community housing development organization project within 24 months after the last day of the month in which HUD notifies the participating jurisdiction of HUD's execution of the HOME Investment Partnership Agreement;

(B) Any funds from Fiscal Year 2014 and prior fiscal year allocations in the United States Treasury account that are not committed within 24 months after the last day of the month in which HUD notifies the participating jurisdiction of HUD's execution of the HOME Investment Partnership Agreement;

(C) Any funds from Fiscal Year 2014 and prior fiscal year allocations in the United States Treasury account that are not expended within 5 years after the last day of the month in which HUD notifies the participating jurisdiction of HUD's execution of the HOME Investment Partnership Agreement; and

(D) Any penalties assessed by HUD under § 92.552.

(ii) For purposes of determining the amount by which the HOME Investment Trust Fund will be reduced or recaptured under paragraphs (d)(2)(i)(A), (B), and (C) of this section, HUD will consider the sum of commitments to CHDOs, commitments, or expenditures, as applicable, from all fiscal year allocations through the Fiscal Year 2014 allocation. This sum must be equal to or greater than the sum of all fiscal year allocations through the fiscal year allocation being examined (minus previous reductions to the HOME Investment Trust Fund), or in the case of commitments to CHDOs, 15 percent of those fiscal year allocations.

(iii) HUD will reduce or recapture HOME funds in the HOME Investment Trust Fund by the amount of all fiscal year allocations through the Fiscal Year 2014 allocation that are uncommitted by the commitment deadline for the Fiscal Year 2015 allocation.

(3) HOME funds in the local account of the HOME Investment Trust Fund must be disbursed before requests are made for HOME funds in the United States Treasury account. Beginning with the Fiscal Year 2015 allocation, the specific funds that are committed to a project will be disbursed for that project. If both funds in the local account and funds in the United States Treasury account are committed to a project, the funds in the local account must be disbursed before requests are made for HOME funds in the United States Treasury account for the project.

(2) Any HOME funds invested in a project that is terminated before completion, either voluntarily or otherwise, must be repaid by the participating jurisdiction, in accordance with paragraph (b)(3) of this section, except for repayments of project-specific community housing development organization loans that are waived, in accordance with §§ 92.301(a)(3) and (b)(3). In addition, any HOME funds used for costs that are not eligible under this part must be repaid by the participating jurisdiction, in accordance with paragraph (b)(3) of this section.

(3) HUD will instruct the participating jurisdiction to either repay the funds to the HOME Investment Trust Fund Treasury account or the local account. If the jurisdiction is not a participating jurisdiction at the time the repayment is made, the funds must be remitted to HUD and reallocated, in accordance with § 92.454.

(d) Commitment of funds in the local account. Beginning with the Fiscal Year 2017 action plan, as provided in 24 CFR 91.220(l)(2) and 91.320(k)(2), program income, repayments, and recaptured funds in the participating jurisdiction's HOME Investment Trust Fund local account must be used in accordance with the requirements of this part, and the amount of program income, repayments, and recaptured funds in the participating jurisdiction's HOME Investment Trust Fund local account at the beginning of the program year must be committed before HOME funds in the HOME Investment Trust Fund United States Treasury account, except for the HOME funds in the United States Treasury account that are required to be reserved (i.e., 15 percent of the funds), under § 92.300(a), for investment only in housing to be owned, developed, or sponsored by community housing development organizations. The deadline for committing program income, repayments, and recaptured funds received during a program year is the date of the participating jurisdiction's commitment deadline for the subsequent year's grant allocation.

(7) Community housing development organization receiving assistance for project-specific technical assistance and site control loans or project-specific seed money loans. The agreement must identify the specific site or sites and describe the amount and use of the HOME funds (in accordance with § 92.301), including a budget for work, a period of performance, and a schedule for completion. The agreement must also set forth the basis upon which the participating jurisdiction may waive repayment of the loans, consistent with § 92.301, if applicable.

(8) Technical assistance provider to develop the capacity of community housing development organizations in the jurisdiction. The agreement must identify the specific nonprofit organization(s) to receive capacity building assistance. The agreement must describe the amount and use (scope of work) of the HOME funds, including a budget, a period of performance, and a schedule for completion.

The Bureau of Indian Affairs (BIA) is adopting as final the interim final rule published on June 30, 2016, adjusting the level of civil monetary penalties contained in Indian Affairs regulations with an initial “catch-up” adjustment under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Office of Management and Budget (OMB) guidance. The Department of the Interior (Department) did not receive any significant adverse comments during the public comment period on the interim final rule, and therefore adopts the rule as final without change.

On June 30, 2016, the Department published an interim final rule (81 FR 42478) to adjust the level of civil monetary penalties contained in Indian Affairs regulations with an initial “catch-up” adjustment under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and OMB guidance.

The Department received no comments on the rule. Consequently, the Department did not make any change to the interim final rule. For these reasons, the Department adopts the interim rule published June 30, 2016 (81 FR 42478), as final without change.

This document contains final regulations that provide transition rules providing that executors and other persons required to file or furnish a statement under section 6035(a)(1) or (2) regarding the value of property included in a decedent's gross estate for federal estate tax purposes before June 30, 2016, need not have done so until June 30, 2016. These final regulations are applicable to executors and other persons who file federal estate tax returns required by section 6018(a) or (b) after July 31, 2015.

DATES:

Effective Date. These regulations are effective on December 2, 2016.

Applicability Dates: For date of applicability, see § 1.6035-2(b).

FOR FURTHER INFORMATION CONTACT:

Theresa Melchiorre (202) 317-6859 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

Section 6018(a) requires executors to file federal estate tax returns with respect to (1) certain estates of citizens or residents of the United States and (2) certain estates of nonresidents that are not citizens of the United States. If an executor is unable to make a complete federal estate tax return as to any property that is a part of a decedent's gross estate, section 6018(b) requires every person or beneficiary holding such property, upon notice from the Secretary, to make a federal estate tax return as to such part of the gross estate.

On July 31, 2015, the President of the United States signed into law H.R. 3236, The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41, 129 Stat. 443 (Act). Section 2004 of the Act added new section 6035.

Section 6035 imposes reporting requirements with regard to the value of property included in a decedent's gross estate for federal estate tax purposes. Section 6035(a)(1) provides that the executor of any estate required to file a return under section 6018(a) must file with the Secretary and furnish to the person acquiring any interest in property included in the decedent's gross estate, a statement identifying the value of each interest in such property as reported on such return and such other information with respect to such interest as the Secretary may prescribe.

Section 6035(a)(2) provides that each other person required to file a return under section 6018(b) must file with the Secretary and furnish to each person who holds a legal or beneficial interest in the property to which such return relates, a statement identifying the same information described in section 6035(a)(1).

Section 6035(a)(3)(A) provides that each statement required to be filed or furnished under section 6035(a)(1) or (2) is to be filed or furnished at such time as the Secretary may prescribe, but in no case at a time later than the earlier of (i) the date that is 30 days after the date on which the return under section 6018 was required to be filed (including extensions actually granted, if any) or (ii) the date which is 30 days after the date such return is filed.

On August 21, 2015, the Treasury Department and the IRS issued Notice 2015-57, 2015-36 IRB 294. That notice delayed until February 29, 2016, the due date for any statements required by section 6035.

On February 11, 2016, the Treasury Department and the IRS issued Notice 2016-19, 2016-09 IRB 362. That notice provided that executors or other persons required to file or furnish a statement under section 6035(a)(1) or (2) before March 31, 2016, need not have done so until March 31, 2016.

On March 4, 2016, the Treasury Department and the IRS published temporary regulations (TD 9757) in the Federal Register (81 FR 11431-01) providing transition relief under § 1.6035-2T. The temporary regulations extended the due date for statements required by section 6035 to March 31, 2016, as provided in Notice 2016-19.

Also on March 4, 2016, the Treasury Department and the IRS published in the Federal Register (81 FR 11486-01) proposed regulations (REG-127923-15). The text of TD 9757 served as the text of the proposed regulations regarding the transition relief provided under § 1.6035-2T.

On March 23, 2016, the Treasury Department and the IRS issued Notice 2016-27, 2016-15 IRB 576. That notice provided that executors or other persons required to file or furnish a statement under section 6035(a)(1) or (2) before June 30, 2016, need not have done so until June 30, 2016.

On June 27, 2016, the Treasury Department and the IRS held a public hearing on the proposed regulations. In addition to the comments received at the hearing, the Treasury Department and the IRS received numerous written comments. Both at the hearing and in written comments, commenters commented favorably on the transition relief providing extensions of time to file and furnish the statements required by section 6035(a)(1) or (2) that the Treasury Department and the IRS had granted in TD 9757 and the notices (including Notice 2016-27 issued after TD 9757 was published in the Federal Register).

Explanation of Provisions

These final regulations reiterate the statement in Notice 2016-27 and provide that executors or other persons required to file or furnish a statement under section 6035(a)(1) or (2) before June 30, 2016, need not have done so until June 30, 2016. These final regulations are issued within 18 months of the date of the enactment of the statutory provisions to which the final regulations relate and, as authorized by section 7805(b)(2), are applicable to executors and other persons who file a return required by section 6018(a) or (b) after July 31, 2015.

Statement of Availability of IRS Documents

IRS Revenue Procedures, Revenue Rulings, notices, and other guidance cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by visiting the IRS Web site at http://www.irs.gov.

Special Analyses

Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required.

In addition, section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) did not apply to TD 9757 because TD 9757 was excepted from the notice and comment requirements of section 553(b) and (c) of the Administrative Procedure Act under the interpretative rule and good cause exceptions provided by section 553(b)(3)(A) and (B). The Act included an immediate effective date, thus making the first required statements due 30 days after enactment. It was necessary to provide more time to provide the statements required by section 6035(a), to allow the Treasury Department and the IRS sufficient time to issue both substantive and procedural guidance on how to comply with the section 6035(a) requirement, and to provide executors and other affected persons the opportunity to review this guidance before preparing the required statements. TD 9757 reiterated the relief in Notice 2016-19 and, because of the immediate need to provide relief, notice and public comment pursuant to 5 U.S.C. 553(b) and (c) was impracticable, unnecessary, and contrary to the public interest. Public comment, however, was received on TD 9757 and all the notices, including Notice 2016-27, at the public hearing held on June 27, 2016, and in written comments submitted on the proposed regulations that cross-referenced and included the text of TD 9757.

It has been certified that the collection of information in these final regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that this rule primarily affects individuals (or their estates) and trusts, which are not small entities as defined by the Regulatory Flexibility Act (5 U.S.C. 601). Although it is anticipated that there may be an incremental economic impact on executors that are small entities, including entities that provide tax and legal services that assist individuals in preparing tax returns, any impact would not be significant and would not affect a substantial number of small entities. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required.

Pursuant to section 7805(f) of the Code, TD 9757 and notice of the proposed rulemaking that cross-referenced and included the text of TD 9757 was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. No comments were received.

Drafting Information

The principal author of these final regulations is Theresa Melchiorre, Office of the Associate Chief Counsel (Passthroughs and Special Industries). Other personnel from the Treasury Department and the IRS participated in their development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended as follows:

PART 1—INCOME TAXESParagraph 1. The authority citation for part 1 is amended by adding an entry in numerical order to read in part as follows:Authority:

(a) Statements due before June 30, 2016. Executors and other persons required to file or furnish a statement under section 6035(a)(1) or (2) after July 31, 2015 and before June 30, 2016, need not have done so until June 30, 2016.

(b) Applicability Date. This section is applicable to executors and other persons who file a return required by section 6018(a) or (b) after July 31, 2015.

This document contains amendments to the User Fee Regulations under 26 CFR part 300. On August 22, 2016, the Treasury Department and the IRS published in the Federal Register (81 FR 56550) a notice of proposed rulemaking (REG-108792-16) relating to the user fees charged for entering into and reinstating and restructuring installment agreements. The Independent Offices Appropriations Act of 1952 (IOAA), which is codified at 31 U.S.C. 9701, authorizes agencies to prescribe regulations establishing user fees for services provided by the agency. Regulations prescribing user fees are subject to the policies of the President, which are currently set forth in the Office of Management and Budget Circular A-25 (the OMB Circular), 58 FR 38142 (July 15, 1993). The OMB Circular allows agencies to impose user fees for services that confer a special benefit to identifiable recipients beyond those accruing to the general public. The agency must calculate the full cost of providing those benefits, and, in general, the amount of a user fee should recover the full cost of providing the service, unless the Office of Management and Budget (OMB) grants an exception under the OMB Circular.

The notice of proposed rulemaking proposed to increase the user fees under § 300.1 for entering into an installment agreement from $120 to $225 and for entering into a direct debit installment agreement from $52 to $107. The notice of proposed rulemaking proposed to increase the user fee under § 300.2 for restructuring or reinstating an installment agreement from $50 to $89. The notice of proposed rulemaking proposed the introduction of two new types of online installment agreements under § 300.1, each subject to a separate user fee: (1) An online payment agreement with a fee of $149 and (2) a direct debit online payment agreement with a fee of $31. Under the notice of proposed rulemaking, the user fee for low-income taxpayers, as defined in § 300.1(b)(3), would continue to be $43 for entering into a new installment agreement, except that the lower fee of $31 for a direct debit online payment agreement would apply to all taxpayers. Under § 300.2(b), the fee for low-income taxpayers restructuring or reinstating an installment agreement would be reduced to $43 from $50. The new user fee rates were proposed to be effective beginning on January 1, 2017. As explained in the notice of proposed rulemaking, the proposed fees bring user fee rates for installment agreements in line with the full cost to the IRS of providing these taxpayer-specific services. In particular, the new user fee structure offers taxpayers more tailored installment agreement options, including a $31 user fee for direct debit online payment agreements, which ensures that taxpayers are not charged more for their chosen installment agreement option than the actual cost incurred by the IRS in providing the type of installment agreement selected by taxpayers. Because OMB has granted an exception to the full cost requirement for low-income taxpayers, low-income taxpayers would continue to pay the reduced fee of $43 for any new installment agreement, except where they request a $31 direct debit online payment agreement, and would pay the reduced $43 fee for restructuring or reinstating an installment agreement.

No public hearing on the notice of proposed rulemaking was held because one was not requested. Five comments were received. After careful consideration of the comments, this Treasury Decision adopts the proposed regulations without change.

Summary of Comments

The first comment suggested that filing a tax return and requesting an installment agreement should not be a two-step process and that taxpayers requesting an installment agreement with the filing of their returns should not be subject to a higher user fee. The comment expressed concern with tying eligibility for the $31 user fee to submitting a request for a direct debit online payment agreement. The comment also noted the length of time it takes the IRS to initiate direct debit installment agreement payments. The comment asserted that taxpayers requesting installment agreements with the filing of their tax returns and paying via direct debit should be entitled to the $31 user fee.

These regulations deal with only the user fees for installment agreements and not the administration of the installment agreement program generally, and so this comment is addressed only to the extent it relates to user fees for installment agreements. As explained in the notice of proposed rulemaking, agencies are required to set user fees at an amount that recovers the full cost of providing the service unless an agency requests, and the OMB grants, an exception to the full cost requirement. The proposed installment agreement fees are structured to reflect the full cost to the IRS to establish and monitor the different types of installment agreements associated with each user fee. The costs to the IRS for installment agreements are the same to the IRS whether the taxpayer requests an installment agreement at the same or a different time from filing its tax return. The regulations now offer taxpayers additional types of installment agreements to choose from, including a low-cost user fee of $31 for a direct debit online payment agreement. A taxpayer may file a return and then request a direct debit online payment agreement and would be charged a fee of only $31. As discussed in the notice of proposed rulemaking, the IRS incurs higher costs in establishing and monitoring all other forms of installment agreements. If a taxpayer chooses to request an installment agreement other than a direct debit online payment agreement, that taxpayer must pay the full cost of that user fee unless the taxpayer qualifies as a low-income taxpayer. The length of time required to establish direct debit installment agreements that the comment described is due to IRS budget cuts in recent years that have resulted in lower staffing levels combined with increased workloads. During peak times of the year, the IRS has more installment agreements to process than available staff to process them and backlogs occur. In addition, there are Federal e-pay requirements that also add time in processing installment agreements paid by direct debit. However, taxpayers using the online payment agreement service receive immediate confirmation of direct debit online payment agreements. Taxpayers requesting installment agreements via a Form 9465 when e-filing are not entitled to the lower $31 user fee under the proposed regulations because the costs associated with processing the Form 9465 are greater than those incurred for taxpayers using the online payment agreement service. At the time taxpayers submit Form 9465 with their e-filed returns, the IRS has no way of determining whether the taxpayers qualify for an installment agreement or whether the payment proposal meets streamlined processing criteria. While the IRS continues to explore ways to make this process completely automated, at this time the process to review a regular installment agreement request requires IRS staff involvement that direct debit online payment agreements do not.

The second comment expressed concern that the proposed increase in user fees was too high and asked whether “any consideration [has] been given to increasing the time frame for an exten[s]ion [from] 120[]days to 180[]days.” It appears that the latter part of this comment is referring to the full pay agreement that has no user fee but requires the taxpayer to full pay within 120 days. The extension of the time period for full pay agreements is unrelated to the proposed increase in the user fees for installment agreements. With regard to the increase in fee, the fee increase is consistent with the requirement under the OMB Circular that agencies that confer special benefits on identifiable recipients beyond those accruing to the general public are to establish user fees that recover the full cost of providing those services. In the notice of proposed rulemaking, the IRS provided a detailed analysis of how it calculated the full cost of this service and the fee is consistent with the full cost of the particular service.

The third comment provided examples of taxpayers with varying circumstances and opined that increasing the user fee for installment agreements would be unfair to taxpayers who are so situated. For taxpayers whose income falls at or below 250 percent of the poverty level as established by the U.S. Department of Health and Human Services and updated annually, the proposed regulations continue to offer a reduced fee for low-income taxpayers of $43, and extend the $43 fee to low-income taxpayers restructuring or reinstating installment agreements. In addition, the proposed regulations establish a lower fee of $31 for online direct debit installment agreements that is available to all taxpayers. Thus, even if taxpayers do not qualify for the reduced low-income taxpayer fee, the proposed regulations permit all taxpayers the option to pay the lower $31 fee by establishing direct debit online payment agreements.

The fourth comment had four main concerns and additional concerns with respect to each of these main concerns.

The fourth comment's first main concern challenged the IRS's application of the OMB Circular. The comment opined that an installment agreement is not a special benefit as provided under the OMB Circular for several reasons. Specifically, the comment noted that if a taxpayer does not have assets to levy, then relief of levy is not a benefit to that taxpayer. The comment suggested that the IRS receives a benefit when a taxpayer enters into an installment agreement and as a result, the installment agreement does not provide a special benefit for purposes of the OMB Circular. The comment questioned how many installment agreements resulted in payments that the IRS would not have otherwise received. The comment also questioned whether installment agreement income is a benefit to the fisc or whether the IRS could use levies to secure the same amount of payment. The comment stated that the IRS is required to enter into certain installment agreements pursuant to section 6159(c) and questioned how a statutory requirement could be considered a special benefit. The comment quoted Section 6(1)(4) of the OMB Circular, which provides that “[n]o charge should be made for a service when the identification of the specific beneficiary is obscure, and the service can be considered primarily as benefiting broadly the general public.” The comment opined that because the IRS may receive some benefit, the specific beneficiary of an installment agreement is incompletely identified. Finally, the comment noted that the OMB Circular allows for exceptions to charging full cost and questioned whether it is good public policy to increase the user fee considering that some installment agreements are statutorily required and help bring noncompliant taxpayers into compliance.

As described in the preamble to the proposed regulations, each taxpayer entering into an installment agreement receives the special benefit of paying an outstanding tax obligation over time rather than immediately. This special benefit does not accrue to the general public because taxpayers are otherwise obligated to pay any outstanding taxes immediately when due. The taxpayer receives this special benefit regardless of whether the taxpayer has any assets on which the IRS could levy. In addition to paying an outstanding tax obligation over time rather than immediately, there are also the special benefits of avoiding enforcement action generally and, for timely filed returns, a reduction of the section 6651 failure to pay penalty to 0.25 percent during any month during which an installment agreement is in effect. The enforcement actions that are put on hold during the pendency of an installment agreement include wage garnishments, the filing of notices of federal tax liens, and the making of levies. Even if it is argued that the government derives some general benefit from collecting outstanding tax liabilities to which it is inarguably entitled, it is still appropriate under the OMB Circular to charge a user fee for entering into, reinstating, or restructuring an installment agreement because installment agreements provide “specific services to specific individuals.” Seafarers Int'l Union of N. Am. v. U.S. Coast Guard, 81 F.3d 179, 183 (D.C. Cir. 1996). The benefit to the government generally of collecting on outstanding tax liabilities is a benefit that accrues to the public generally and does not diminish the special benefit provided to an identifiable taxpayer who requests an installment agreement. As noted in the notice of proposed rulemaking, the IOAA permits the IRS to charge a user fee for providing a “service or thing of value.” 31 U.S.C. 9701(b). A government activity constitutes a “service or thing of value” when it provides “special benefits to an identifiable recipient beyond those that accrue to the general public.” See the OMB Circular Section 6(a)(1). Among other things, a “special benefit” exists when a government service is performed at the request of a taxpayer and is beyond the services regularly received by other members of the same group or the general public. See OMB Circular Section 6(a)(1)(c). Under the IOAA, agencies may impose “specific charges for specific services to specific individuals or companies.” See Fed. Power Comm'n v. New England Power Co., 415 U.S. 345, 349 (1974); see also Seafarers, 81 F.3d at 182-83 (D.C. Cir. 1996) (“[A] user fee will be justified under the IOAA if there is a sufficient nexus between the agency service for which the fee is charged and the individuals who are assessed.”).

Section 6(a)(3) of the OMB Circular explains that “when the public obtains benefits as a necessary consequence of an agency's provision of special benefits to an identifiable recipient (i.e., the public benefits are not independent of, but merely incidental to, the special benefits), an agency need not allocate any costs to the public and should seek to recover from the identifiable recipient either the full cost to the Federal Government of providing the special benefit or the market price, whichever applies.” While it is true that installment agreements benefit tax administration and collection, and by extension the public fisc, the benefit is incidental to the special benefits of allowing taxpayers to satisfy their Federal tax liabilities over time rather than when due as required by the Code and avoiding enforcement actions.

By the very nature of government action, the general public will almost always experience some benefit from an activity that is subject to a user fee. See, e.g., Seafarers, 81 F.3d at 184-85 (D.C. Cir. 1996). However, as long as the activity confers a specific benefit upon an identifiable beneficiary, it is permissible for the agency to charge the beneficiary a fee even though the public will also experience an incidental benefit. See Engine Mfrs. Ass'n v. E.P.A., 20 F.3d 1177, 1180 (D.C. Cir. 1994) (“If the agency does confer a specific benefit upon an identifiable beneficiary . . . then it is of no moment that the service may incidentally confer a benefit upon the general public as well.”) citing Nat'l Cable Television Ass'n v. FCC, 554 F.2d 1094, at 1103 (D.C. Cir. 1976). It is permissible for a service for which a user fee is charged to generate an “incidental public benefit,” and there is no requirement that the agency weigh this public benefit against the specific benefit to the identifiable recipient. Seafarers, 81 F.3d at 183-84 (D.C. Cir. 1996). Furthermore, the benefit to the fisc of collecting outstanding taxes is not an additional benefit to the government because the IRS would collect those amounts through other means absent the installment agreement. Even so, an agency is still entitled to charge for services that assist a person in complying with her statutory duties. See In Elec. Indus Ass'n v. FCC, 554 F.2d 1109, 1115 (D.C. Cir. 1976).

While the IRS is required to enter into certain installment agreements pursuant to section 6159(c), the IRS may still charge a fee for providing that service. In fact, under the OMB Circular, there are several examples of special benefits (e.g., passport, visa, patent) for which the issuing agency may charge a fee even though the agency is required to issue such benefit if the individual meets certain statutory or regulatory requirements. In addition, a taxpayer meeting the criteria in section 6159(c) must still submit a request for an installment agreement before one is established. Section 6159(c) requires that the IRS enter into the installment agreement provided that the taxpayer establishes its eligibility for such an agreement. In that situation, the IRS incurs the costs of establishing and monitoring these installment agreements as with any other installment agreement. Therefore, it is proper under the OMB Circular to charge a user fee for providing this service.

The IRS has taken public policy into consideration and is providing multiple user fee options to tailor the user fees to the specific IRS costs in establishing and monitoring the installment agreements. As a result, the IRS has introduced a reduced fee of $31 for direct debit online payment agreements. This $31 reduced fee is available to all taxpayers choosing to obtain the special benefits of installment agreements by using this service. The $31 reduced fee reflects the substantially lower costs the IRS incurs for establishing and monitoring direct debit online payment agreements. Thus, the installment agreement user fee structure now more closely reflects the full cost of processing each specific type of installment agreement.

The fourth comment's second main concern was that the IRS charges user fees inconsistently because, for example, the IRS does not charge user fees for toll-free telephone service, estimated income tax payments, walk-in service, notice letters, annual filing season program record of completion, and administrative appeals within the IRS.

The IRS's user fee policies are consistent with the OMB Circular. The IOAA authorizes agencies to prescribe regulations that establish charges for services provided by the agency, that is, user fees that “are subject to policies prescribed by the President. . . .” One of the OMB Circular's stated objectives is to “ensure that each service . . . provided by an agency to specific recipients be self-sustaining.” OMB Circular Section 5(a). The General Policy of the OMB Circular states that “a user charge . . . will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the general public.” OMB Circular Section 6. The presumption under the OMB Circular is that agencies are encouraged, but not mandated, to charge user fees where special benefits are provided to identifiable individuals. Installment agreements are such special benefits. For purposes of these regulations, the IRS need only take into consideration comments relating to the installment agreement user fees and need not address comments relating to other services for which no fee is charged. With respect to installment agreement user fees, the IRS has charged fees since 1995 in accordance with the OMB Circular that requires full cost unless an exception is granted. The OMB Circular requires the IRS to review the user fees it charges for special services biennially to ensure that the fees are adjusted for cost. See OMB Circular Section 8(e). The new installment agreement user fee structure is consistent with that requirement.

The fourth comment's third main concern questioned the “optics” of increasing installment agreement user fees because of IRS budget constraints. As discussed in this Summary of Comments, the IRS has determined that the proposed installment agreement user fees are appropriate and consistent with the OMB Circular, and the question of “optics” raised in this comment is not relevant in this analysis. Section 6(a)(2)(a) of the OMB Circular provides that user fees will be sufficient to recover the full cost to the Government of providing the service except as provided in Section 6(c) of the OMB Circular. The exceptions in Section 6(c)(2) of the OMB Circular provide that agency heads may recommend to the OMB that exceptions to the full cost requirement be made when either (1) the cost of collecting the user fee would represent an unduly large part of the fee or (2) any other condition exists that, in the opinion of the agency head, justifies an exception. The cost of collecting the proposed user fees for the various types of installment agreements will not represent an unduly large part of the fee for the activity because it occurs automatically with the first installment payment. As noted above, Section 6(a)(2)(a) of the OMB Circular requires that user fees recover the full cost to the government of providing the service and nothing in the OMB Circular mandates agency heads to seek an exception to the full cost requirement. Nonetheless, the Commissioner of Internal Revenue has determined that there is a compelling tax administration reason for seeking an exception to the full cost requirement for low-income taxpayers.

The fourth comment's fourth main concern focused on the overall amount of the proposed user fees and included a number of related comments on the size of the fees, the agency's methodology in calculating the fees, and the efforts the IRS has taken to minimize the costs of providing these services. The comment questioned why the IRS decided not to change the $43 user fee for low-income taxpayers. The comment asked why the increase in costs of these services exceeded the rate of inflation during the past two years. The comment also questioned the IRS's efficiency in providing this special benefit and the IRS's concern in ensuring that its costs are driven down when providing this service. The comment expressed concern that if installment agreement volumes remained the same, the agency would increase its user fee receipts by tens of millions of dollars. Finally, the comment noted that the user fees do not depend on the balance due under an installment agreement and questioned why the user fee is taken from the first payments due under the installment agreement.

Contrary to what the comment asserted, the per-unit cost of the installment agreement program has not generally increased, rather it has generally decreased. In the 2013 biennial review, the IRS determined that the full cost of an installment agreement was $282, the full cost of an installment agreement paid by way of direct debit was $122, and the full cost of restructuring and reinstating an installment agreement was $85. See 78 FR 53702 (2013 Regulations). In connection with the 2013 biennial review and the 2013 Regulations, the IRS had requested and received an exception to the full cost requirement under the OMB Circular for the installment agreement user fees. As a result, the 2013 Regulations did not charge full cost for any of the installment agreement options. Requesting an exception to the full cost requirement of the OMB Circular is within the discretion of the agency head and must be approved by the Office of Management and Budget. In the 2015 biennial review, the IRS determined that the full cost of an installment agreement is $225, the full cost of an installment agreement paid by way of direct debit is $107, and the full cost of restructuring and reinstating an installment agreement is $89. Thus, contrary to the comment's assertion, the cost of the installment agreement program has generally decreased rather than generally increased during the span of two years. Furthermore, the IRS always strives to make its services cost-effective. The decrease in the installment agreement costs since 2013 demonstrates one of the ways the IRS seeks to make its services most cost effective for the public. The IRS also seeks new ways to makes its services more accessible to taxpayers. The IRS has worked to improve the usability of the online payment agreement application that provides for significantly lower costs. The user fee for the online payment agreement is $149, and if the installment agreement is paid by way of direct debit, is only $31. Practitioners can submit an online payment agreement application on behalf of their clients to secure lower fees. For smaller tax liabilities, the IRS has established procedures for setting up installment agreements utilizing guaranteed, streamlined, or in-business express criteria that are quicker to process and do not require securing a collection of information statement. See I.R.M. 5.14.5. The IRS has never based its user fee on the amount of liability due under the agreement, which would be inconsistent with the full cost requirement under the OMB Circular. The IRS, however, has provided taxpayers the option to pay their liability in full over 120 days without being charged any user fee. Furthermore, under the new fee structure, taxpayers choose a specific installment agreement service and pay the cost of the service. For example, a taxpayer may choose a direct debit online payment agreement and pay only $31 or a taxpayer may choose a regular installment agreement and pay $225. With regard to the user fee being taken from the first payments due under the installment agreement, this is not relevant for purposes of the regulations as this is not addressed in the regulations. Regardless, the OMB Circular requires user fees to be “collected in advance of, or simultaneously with, the rendering of services unless appropriations and authority are provided in advance to allow reimbursable services.” Section 6(a)(2)(C) of the OMB Circular. Instead of requiring the taxpayer to pay the entire fee in advance of the IRS entering into the installment agreement, the IRS allows the taxpayer to pay the fee with the first installment agreement payments, thereby lessening the burden on the taxpayer and making installment agreements more accessible to taxpayers.

The fifth comment had three suggestions: (1) Eliminate installment agreement user fees for low-income taxpayers, (2) revise internal guidelines to place less emphasis on speedy collection practices and more emphasis on viable collection practices, and (3) increase the transparency of the installment agreement user fees in publications.

The fifth comment's first suggestion was that the IRS should waive the entire user fee for low-income taxpayers and thereby incentivize them to enter into installment agreements instead of being placed in currently not collectible status or entering into an offer in compromise. According to the comment, this would increase the amount of revenue that the IRS collects and encourage taxpayers to enter into compliance. The comment pointed out that there is no user fee for a low-income taxpayer entering an offer in compromise. The IRS's response to a similar comment made to the installment agreement fee increase proposed in the 2013 notice of proposed rulemaking pointed out that the offer in compromise fee is charged for mere consideration of the offer and is not refunded if it is not accepted. The comment claimed that the IRS contradicted itself by further responding that the purpose of a user fee is to recover the cost to the government for a particular service to the recipient.

The comment opined that by waiving the low-income taxpayer user fee entirely, the number of low-income taxpayers making payments on their tax liabilities could increase. By way of example, the comment posited the possibility of a low-income taxpayer submitting an offer in compromise, paying no fee, and the IRS ultimately collecting less than it would have if it had allowed the low-income taxpayer to enter into an installment agreement with a complete fee waiver. According to the comment, if a low-income taxpayer enters into currently not collectible status and makes voluntary payments, those payments will be sporadic and less than would be collected from an installment agreement since the taxpayer would not receive monthly reminders. The comment referenced the IRS's response to a similar comment made to the installment agreement fee increase proposed in the 2013 notice of proposed rulemaking, to which the IRS responded that generally taxpayers who have the ability to pay their tax liability over time (and thus are eligible for installment agreements) will not qualify for currently not collectible status. In response, the comment suggested that many taxpayers that qualify for currently not collectible status may be mistakenly placed into installment agreements because the taxpayers may feel pressured to make payments, the taxpayers misstate their expenses and income, or the taxpayers are willing to cut back on their monthly living expenses. The comment provided examples to show how the $43 fee created disincentives for low-income taxpayers to enter into installment agreements in cases where the liability was relatively small. The comment requested that the IRS clarify that the user fee does not have to be paid up front but may be paid in installments if the taxpayer's monthly installment payment is less than the user fee.

The IRS considered the effect of the user fee on low-income taxpayers in 2006 and 2013 when the installment agreement user fees were updated. Both times, the IRS determined that the user fee should remain $43 for low-income taxpayers. The IRS again has determined that the user fee for installment agreements (other than for a direct debit online payment agreement) should remain at $43 for low-income taxpayers, both because requiring the full rate would be financially burdensome to low-income taxpayers and because waiving the fee entirely is not fiscally sustainable for the IRS given the constraints on its resources for tax administration. Typically, a taxpayer that is able to pay in full the liability under an installment agreement is not eligible to enter into an offer in compromise. As discussed in the preamble to T.D. 9647, 78 FR 72016-01, a taxpayer that is in currently not collectible status is typically not eligible to enter into an installment agreement. The low-income taxpayers that enter into installment agreements described in the examples the comment presented do so as a result of the taxpayers' choices or erroneous submissions of information to the IRS. Thus, the comment's hypothetical low-income taxpayer is the exception not the general rule. To ensure that low-income taxpayers are more aware of the fee options for the various types of installment agreements, the IRS will be revising its publications to make them consistent with the final regulations.

The fifth comment's second main concern was that low-income taxpayers are not always aware of the availability of the reduced fee and as a consequence some low-income taxpayers pay the regular fee. The comment suggested that IRS employees could do more to make low-income taxpayers aware of their options. The comment also asserted that installment agreements are set up not to allow low-income taxpayers to modify payments based on unforeseen changes in economic circumstances. The comment stated this can result in low-income taxpayers defaulting and either become subject to collection action or subject to the installment agreement reinstatement fee of $89 under the proposed regulations.

The comment requested that the IRS revise its procedures in the Internal Revenue Manual to place less emphasis on timely collection practices and more emphasis on viable collection practices.

The fifth comment's concerns about tax administration are generally beyond the scope of these regulations. However, for purposes of clarification, under the proposed regulations the user fee for reinstating an installment agreement for a low-income taxpayer would be $43, not $89. Furthermore, while these concerns do not affect the content of these final regulations, the IRS will consider these comments when updating the procedures in the Internal Revenue Manual for entering into installment agreements.

The fifth comment's third suggestion was for the IRS to clearly communicate to the public both through the internet and in hard copy publications the revised fee schedule so that taxpayers may make informed decisions when deciding the manner of setting up an installment agreement. The comment suggested that taxpayers who lack access to the internet, lack computer efficiency, lack a bank account, or have other disabilities or barriers should not be subjected to the higher user fees.

The IRS will be updating its electronic and hard copy publications to reflect the user fees in the final regulations. As explained in the proposed notice of rulemaking and in this Summary of Comments, the purpose of the user fees for installment agreements is to recover the full cost to the IRS of providing this special benefit to specific beneficiaries and the user fees in these final regulations are in accordance with the OMB Circular.

Special Analyses

Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the information that follows. The economic impact of these regulations on any small entity would result from the entity being required to pay a fee prescribed by these regulations in order to obtain a particular service. The dollar amount of the fee is not, however, substantial enough to have a significant economic impact on any entity subject to the fee. Low-income taxpayers and taxpayers entering into direct debit online payment agreements will be charged a lower fee, which lessens the economic impact of these regulations. Accordingly, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business and no comments were received.

Drafting Information

The principal author of these regulations is Maria Del Pilar Austin of the Office of the Associate Chief Counsel (Procedure and Administration). Other personnel from the Treasury Department and the IRS participated in their development.

List of Subjects in 26 CFR Part 300

Reporting and recordkeeping requirements, User fees.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 300 is amended as follows:

PART 300—USER FEESParagraph 1. The authority citation for part 300 continues to read as follows:Authority:

(b) Fee. The fee for entering into an installment agreement before January 1, 2017, is $120. The fee for entering into an installment agreement on or after January 1, 2017, is $225. A reduced fee applies in the following situations:

(1) For installment agreements entered into before January 1, 2017, the fee is $52 when the taxpayer pays by way of a direct debit from the taxpayer's bank account. The fee is $107 when the taxpayer pays by way of a direct debit from the taxpayer's bank account for installment agreements entered into on or after January 1, 2017;

(2) For online payment agreements entered into before January 1, 2017, the fee is $120, except that the fee is $52 when the taxpayer pays by way of a direct debit from the taxpayer's bank account. The fee is $149 for entering into online payment agreements on or after January 1, 2017, except that the fee is $31 when the taxpayer pays by way of a direct debit from the taxpayer's bank account; and

(3) Notwithstanding the type of installment agreement and method of payment, the fee is $43 if the taxpayer is a low-income taxpayer, that is, an individual who falls at or below 250 percent of the dollar criteria established by the poverty guidelines updated annually in the Federal Register by the U.S. Department of Health and Human Services under authority of section 673(2) of the Omnibus Budget Reconciliation Act of 1981 (95 Stat. 357, 511), or such other measure that is adopted by the Secretary, except that the fee is $31 when the taxpayer pays by way of a direct debit from the taxpayer's bank account with respect to online payment agreements entered into on or after January 1, 2017;

Par. 3. In § 300.2, paragraphs (b) and (d) are revised to read as follows:§ 300.2 Restructuring or reinstatement of installment agreement fee.

(b) Fee. The fee for restructuring or reinstating an installment agreement before January 1, 2017, is $50. The fee for restructuring or reinstating an installment agreement on or after January 1, 2017, is $89. If the taxpayer is a low-income taxpayer, that is, an individual who falls at or below 250 percent of the dollar criteria established by the poverty guidelines updated annually in the Federal Register by the U.S. Department of Health and Human Services under authority of section 673(2) of the Omnibus Budget Reconciliation Act of 1981 (95 Stat. 357, 511), or such other measure that is adopted by the Secretary, then the fee for restructuring or reinstating an installment agreement on or after January 1, 2017 is $43.

This regulation establishes tolerances for residues of bicyclopyrone in or on wheat and barley. Syngenta Crop Protection, LLC. requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).

DATES:

This regulation is effective December 2, 2016. Objections and requests for hearings must be received on or before January 31, 2017, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES:

The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2015-0560, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Public Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPP Docket is (703) 305-5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

B. How can I get electronic access to other related information?

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

C. How can I file an objection or hearing request?

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2015-0560 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before January 31, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2015-0560, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.II. Summary of Petitioned-For Tolerance

In the Federal Register of October 21, 2015 (80 FR 63731) (FRL-9935-29), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 5F8374) by Syngenta Crop Protection, LLC., P.O. Box 18300, Greensboro, NC 27419. The petition requested that 40 CFR part 180.682 be amended by establishing tolerances for residues of the herbicide, bicyclopyrone: 4-hydroxy-3-{2-[(2-methoxyethoxy) methyl}-6-(trifluoromethyl)-3-pyridylcarbonyl} bicyclo oct-3-en-2-one, in or on the raw agricultural commodities: Barley, bran at 0.15 parts per million (ppm); barley, germ at 0.10 ppm; barley, grain, at 0.07 ppm; barley, hay at 0.3 ppm; barley, straw at 0.50 ppm; wheat, aspirated grain fractions at 0.50 ppm; wheat, bran at 0.15 ppm; wheat, forage at 0.50 ppm; wheat, germ at 0.10 ppm; wheat, grain, at 0.04 ppm; wheat, hay at 0.9 ppm; and wheat, straw at 0.50 ppm. That document referenced a summary of the petition prepared by Syngenta Crop Protection, LLC., the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has revised the proposed tolerances to wheat, forage at 0.40 ppm; wheat, hay at 0.80 ppm; wheat, bran at 0.07 ppm; grain, aspirated fractions at 0.30 ppm; and barley, straw at 0.40 ppm. EPA has increased the existing tolerances to cattle, meat byproducts at 2.0 ppm; goat, meat byproducts at 2.0 ppm; sheep, meat byproducts at 2.0 ppm; horse, meat byproducts; at 2.0 ppm; and hog, meat byproducts at 0.40 ppm. EPA has determined that tolerances are not needed to be established for barley, germ and wheat, germ. The reason for these changes are explained in Unit IV.C.

III. Aggregate Risk Assessment and Determination of Safety

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for bicyclopyrone including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with bicyclopyrone follows.

A. Toxicological Profile

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

The effects of bicyclopyrone are indicative of inhibition of 4-hydroxyphenylpyruvate dioxygenase (HPPD). Plasma tyrosine levels were consistently elevated in rats, rabbits, and dogs (levels in mice were not tested). Consistent with these elevated tyrosine levels, ocular effects (corneal opacity, keratitis) were observed for subchronic and chronic durations through the oral and dermal routes in rats, which was the most sensitive species tested (minor instances in dogs). There were also increased incidences of thyroid follicular hyperplasia and a chronic progressive nephropathy.

While minor instances of ocular effects were observed in dogs, different toxicological effects were generally observed. For subchronic oral exposure, clinical signs (moderate hypoactivity, slightly unsteady gait, increased heart rate, regurgitation, and vomiting) were observed, and clinical pathological indicators of toxicity occurred in the eye and the thymus. Following chronic exposure, there was a dose-dependent increase in chromatolysis and swelling of selected neurons in the dorsal root ganglia, and degeneration of nerve fibers in the spinal nerve roots in both sexes. In one female dog at the high dose, corneal opacity and light sensitivity were observed.

Across the database, there were decreased absolute body weights (the only finding in mice for any duration) and food consumption. There were no signs of immunotoxicity or neurotoxicity in rodents.

Bicyclopyrone treatment resulted in developmental toxicity in both rats and rabbits, and there was an increased quantitative fetal susceptibility in both species tested. In rats, maternal toxicity was not observed up to 1,000 milligram/kilogram/day (mg/kg/day). Fetal effects occurred at all doses (≥100 mg/kg/day), and manifested as skeletal variations (increased incidences of full or rudimentary supernumerary ribs, pelvic girdle malpositioned caudal, costal cartilage 11 long). In New Zealand White rabbits, maternal effects consisted of mortality/moribundity in conjunction with minimal food consumption at 200 mg/kg/day. Fetal effects once again occurred at all doses tested (≥10 mg/kg/day). The sole fetal effect at the lowest dose tested was the appearance of the 27th presacral vertebrae. There were two studies in Himalayan rabbits. In both studies, maternal effects consisted of macroscopic findings in the stomach wall and an increased incidence of post-implantation loss at the 250 mg/kg/day dose level. In the first study, fetal effects occurred starting at 50 mg/kg/day and consisted of skeletal variations (increased incidence of the 27th prepelvic vertebra and malpositioned pelvic girdle). In the second study, the increased quantitative fetal susceptibility was not observed due to a change in the dose selection. Fetal effects occurred at 250 mg/kg/day and consisted of external, visceral, and skeletal abnormalities, and visceral variations, skeletal, bone and cartilage variations. In total, the effects in these studies are consistent with effects of other chemicals in this class.

In the two-generation reproductive study in rats, ocular toxicity occurred in parents and offspring and there was no increased offspring susceptibility of any kind. Reproductive effects included changes in sperm parameters, and a decrease of precoital interval.

To determine the mechanism for the thyroid hyperplasia observed in the chronic/carcinogenicity study in rats, two mode-of-action studies were performed. In the in vitro study, bicyclopyrone was negative for thyroid peroxidase inhibition. The results from the in vivo study suggested that the observed thyroid hyperplasia was the result of increased metabolism of thyroid hormones indicated by: (1) Decreased plasma T3 and T4 levels, (2) increased thyroid follicular cell hypertrophy, (3) increased liver weights associated, and (4) increased hepatocellular centrilobular hypertrophy and increased hepatic uridine diphosphate glucuronyl transferase (UDPGT) activities. Bicyclopyrone is categorized as having low acute lethality via all routes of administration. Bicyclopyrone produces minimal eye irritation and mild acute inhalation toxicity.

Two adequate carcinogenicity studies were submitted. One study conducted on rats showed the presence of rare ocular tumors in male rats only. The corneal tumors observed in male rats are (1) treatment related, (2) found at doses that were considered to be adequate and not excessive for assessing carcinogenicity, (3) there are no concerns for mutagenicity or genotoxicity, and (4) are supported by structure-activity relationship (SAR) data for another HPPD inhibitor, tembotrione. Another study conducted on mice showed lung tumors, which are not considered treatment related. Because the tumors are found only in one species and only in males, consistent with the Agency guidelines for carcinogen risk assessment, the Agency has classified bicyclopyrone as “suggestive evidence of cancer” and has determined that quantification of bicyclopyrone's carcinogenic potential is not required. A non-linear approach (i.e., reference dose (RfD)) will adequately protect for all chronic toxicity, including carcinogenicity that could result from exposure to bicyclopyrone. Using EPA's non-linear approach, the 1000X combined uncertainty factor used to calculate the chronic RfD/chronic population-adjusted dose for the chronic dietary assessment, generates a dose which is 10,000-fold lower than the dose at which the ocular tumors were not observed and is thus protective of their potential formation.

Specific information on the studies received and the nature of the adverse effects caused by bicyclopyrone as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document titled “Bicyclopyrone: Human Health Risk Assessment for the Section 3 Registration Action on Cereals (Wheat and Barley)” at pp. 29-34 in docket ID number EPA-HQ-OPP-2015-0560.

B. Toxicological Points of Departure/Levels of Concern

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which the NOAEL and the LOAEL are identified. Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a RfD—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm. A summary of the toxicological endpoints for bicyclopyrone used for human risk assessment is discussed in Unit III. B of the final rule published in the Federal Register of April 23, 2015 (80 FR 22648) (FRL-9926-66).

C. Exposure Assessment

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to bicyclopyrone, EPA considered exposure under the petitioned-for tolerances as well as all existing bicyclopyrone tolerances in 40 CFR 180.682. EPA assessed dietary exposures from bicyclopyrone in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. Such effects were identified for bicyclopyrone. In estimating acute dietary exposure, EPA used food consumption information from the United States Department of Agriculture (USDA) 2003-2008 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII). The acute dietary analysis was conducted for bicyclopyrone assuming tolerance level residues, default processing factors, and 100% crop treatment (PCT) information.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA 2003-2008 CSFII. The chronic dietary exposure assessment was conducted for bicyclopyrone assuming average field trial residues for crops, average empirical processing factors, anticipated residues for livestock commodities, and PCT estimates for some commodities.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has determined that a separate cancer exposure assessment does not need to be conducted.

iv. Anticipated residue and percent crop treated (PCT) information. Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such data call-ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of these tolerances.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition A: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition B: The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition C: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.

In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by FFDCA section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The Agency estimated the PCT for existing uses as follows: The chronic analysis incorporated the following PCT estimates: Field corn, 40% and sweet/popcorn, 35%. The PCT for livestock commodities is based on the PCT estimate value for the livestock feed item used in the dietary burden with the highest PCT (field corn, 40%).

In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6-7 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.

The Agency estimated the PCT for new uses as follows: The chronic analysis incorporated the following PCT estimates: Barley, 5% and wheat, 1%.

The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition A, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions B and C, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which bicyclopyrone may be applied in a particular area.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for bicyclopyrone in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of bicyclopyrone. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

The Surface Water Concentration Calculator (SWCC) computer model was used to generate surface water Estimated Drinking Water Concentrations (EDWCs), while the Pesticide Root Zone Model for Groundwater (PRZM-GW) and the Screening Concentration in Ground Water (SCI-GROW) models were used to generate groundwater EDWCs. The maximum acute, chronic, and cancer surface water EDWCs associated with bicyclopyrone use on wheat and barley were 3.43, 1.02, and 0.46 parts per billion (ppb), respectively. For groundwater sources of drinking water, the maximum acute, chronic and cancer EDWCs of bicyclopyrone in shallow groundwater from PRZM-GW were 4.82, 4.2, and 2.1 ppb, respectively. EDWCs of 4.82 ppb and 4.2 ppb were used in the acute and chronic analyses, respectively.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Bicyclopyrone is not registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

There are marked differences among species in the ocular toxicity associated with bicyclopyrone's mechanism of toxicity, the inhibition of HPPD. Ocular effects following treatment with HPPD inhibitor herbicides are seen in the rat but not in the mouse. Monkeys also seem to be recalcitrant to the ocular toxicity induced by HPPD inhibition. One explanation for this species-specific response in ocular opacity may be related to species differences in the clearance of tyrosine. A metabolic pathway exists to remove tyrosine from the blood that involves the liver enzyme tyrosine aminotransferase (TAT). In contrast to rats where ocular toxicity is observed following exposure to HPPD-inhibiting herbicides, mice and humans are unlikely to achieve the levels of plasma tyrosine necessary to produce ocular opacities because the activity of TAT in these species is much greater compared to rats.

HPPD inhibitors (e.g., nitisinone) are used as an effective therapeutic agent to treat patients suffering from rare genetic diseases of tyrosine catabolism. Treatment starts in childhood but is often sustained throughout patient's lifetime. The human experience indicates that a therapeutic dose (1 mg/kg/day dose) of nitisinone has an excellent safety record in infants, children, and adults and that serious adverse health outcomes have not been observed in a population followed for approximately a decade. Rarely, ocular effects are seen in patients with high plasma tyrosine levels; however, these effects are transient and can be readily reversed upon adherence to a restricted protein diet. This observation indicates that an HPPD inhibitor in and of itself cannot easily overwhelm the tyrosine-clearance mechanism in humans.

Therefore, exposures to environmental residues of HPPD-inhibiting herbicides are unlikely to result in the high blood levels of tyrosine and ocular toxicity in humans due to an efficient metabolic process to handle excess tyrosine. The EPA continues to study the complex relationships between elevated tyrosine levels and biological effects in various species. In the future, assessments of HPPD-inhibiting herbicides may consider more appropriate models and cross species extrapolation methods. Therefore, EPA has not conducted cumulative risk assessment with other HPPD inhibitors.

D. Safety Factor for Infants and Children

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor (FQPA SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. The FQPA SF is retained at 10X for all exposure scenarios based on use of a LOAEL for the points of departure. The toxicology database for bicyclopyrone is adequate for characterizing toxicity and quantification of risk for food and non-food uses; however, a LOAEL from the New Zealand white rabbit developmental and chronic/carcinogenicity rat toxicity studies has been used as the POD for several scenarios.

There is no evidence of neurotoxicity in either of the neurotoxicity screening batteries, but there are effects in the chronic dog study. The level of concern is low, however, since the study and POD chosen for the chronic dietary exposure scenario is protective of these effects. There is evidence of increased quantitative fetal susceptibility following in utero exposure in both rats and rabbits; however, these effects are well characterized and the selected endpoints are protective of the observed fetal effects. Lastly, there are no residual uncertainties in the exposure database.

E. Aggregate Risks and Determination of Safety

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to bicyclopyrone will occupy 4.6% of the aPAD for females 13-49 years old, the population group receiving the greatest exposure.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to bicyclopyrone from food and water will utilize 90% of the cPAD for children <1 years old the population group receiving the greatest exposure. There are no residential uses for bicyclopyrone.

3. Short-term risk. A short-term adverse effect was identified; however, bicyclopyrone is not registered for any use patterns that would result in short-term residential exposure. Short-term risk is assessed based on short-term residential exposure plus chronic dietary exposure. Because there is no short-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short-term risk), no further assessment of short-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short-term risk for bicyclopyrone.

4. Intermediate-term risk. An intermediate-term adverse effect was identified; however, bicyclopyrone is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for bicyclopyrone.

5. Aggregate cancer risk for U.S. population. Because the Agency has determined that the chronic RfD will be protective of any potential cancer risk and there is not a chronic risks do not exceed the Agency's level of concern, EPA concludes that there is not a concern for cancer risk from exposure to bicyclopyrone.

6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to bicyclopyrone residues.

IV. Other ConsiderationsA. Analytical Enforcement Methodology

Adequate enforcement methodology liquid chromatography-mass spectroscopy/mass spectroscopy (LC-MS/MS) methods for tolerance enforcement have been developed and independently validated. For all matrices and analytes, the level of quantification (LOQ), defined as the lowest spiking level where acceptable precision and accuracy data were obtained, was determined to be 0.01 ppm for each of the common moieties, SYN503780 and CSCD686480, for a combined LOQ of 0.02 ppm is available to enforce the tolerance expression.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level. The Codex has not established a MRL for bicyclopyrone.

C. Revisions to Petitioned-For Tolerances

The requested tolerance levels for some wheat and barley raw agricultural commodities (RAC) differ slightly from those being set by the EPA. Although both the petitioner and EPA have used the Organization for Economic Cooperation and Development (OECD) calculation procedures to determine tolerance levels, EPA determined that some of the field residue trials were not independent, thus resulting in different inputs. Using the highest average RAC residues and average processing factors, EPA calculated tolerance levels for processed commodities that were generally lower than those requested and determined that the requested tolerances for residues in/on wheat and barley germ are not necessary as the expected residue levels are covered by the RAC tolerance levels.

Consistent with 40 CFR 180.6, EPA is amending existing livestock commodity tolerances as necessary. As a result of increased dietary burdens resulting from the use on wheat and barley commodities, the existing tolerances of 1.5 ppm for residues in/on the meat byproducts of cattle, goats, horses, and sheep are increased to 2.0 ppm; and the existing tolerance of 0.15 ppm for residues in/on for hog meat byproducts is increased to 0.40 ppm.

In addition, EPA changed the commodity terminology for aspirated grain fractions to grain, aspirated fractions in order to conform to terms used in the Agency's Food and Feed Commodity Vocabulary and amended the tolerance value for barley, hay from 0.3 ppm to 0.30 ppm to conform with the Agency policy to carry tolerance levels out two significant figures.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

VII. Congressional Review Act

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Final rule.

SUMMARY:

NMFS is issuing regulations under the Tuna Conventions Act to implement certain provisions of two Resolutions adopted by the Inter-American Tropical Tuna Commission (IATTC) in 2016: Resolution C-16-01 (Collection and Analyses of Data On Fish-Aggregating Devices) and Resolution C-16-06 (Conservation Measures for Shark Species, with Special Emphasis on the Silky Shark (Carcharhinus Falciformis) for the Years 2017, 2018, and 2019). Per Resolution C-16-01, these regulations require the owner or operator of a U.S. purse seine vessel to ensure characters of a unique code be marked indelibly on each fish aggregating device (FAD) deployed or modified on or after January 1, 2017, in the IATTC Convention Area. The vessel owner or operator must record and submit information about the FAD, as described in Annex I of Resolution C-16-01. Per Resolution C-16-06, these regulations prohibit the owner or operator of a U.S. purse seine vessel from retaining on board, transshipping, landing, or storing, in part or whole, carcasses of silky sharks caught by purse-seine vessels in the IATTC Convention Area. These regulations also provide limits on the retained catch of silky sharks caught in the IATTC Convention Area. This rule is necessary for the United States to satisfy its obligations as a member of the IATTC.

On October 11, 2016, NMFS published a proposed rule in the Federal Register (81 FR 70080) to implement certain provisions of Resolutions C-16-01 and C-16-06 adopted by the IATTC in 2016. The proposed rule contained additional background information, including information on the IATTC, the international obligations of the United States as an IATTC member, and the need for regulations. The 30-day public comment period for the proposed rule closed on November 10, 2016.

The final rule is implemented under the Tuna Conventions Act (16 U.S.C. 951 et seq.), as amended on November 5, 2015, by title II of Public Law 114-81. The recent amendments direct the Secretary of Commerce, in consultation with the Secretary of State, and, with respect to enforcement measures, the U.S. Coast Guard, to promulgate such regulations as may be necessary to carry out the United States' obligations under the Antigua Convention, including recommendations and decisions adopted by the IATTC. The authority of the Secretary of Commerce to promulgate such regulations has been delegated to NMFS. This rule implements certain provisions of Resolutions C-16-01 and C-16-06 for U.S. commercial fishing vessels that fish for tuna or tuna-like species in the IATTC Convention Area. The preamble of the proposed rule included a detailed description of the elements of this rule.

This rule includes four elements: Two elements regarding FADs and two elements regarding silky sharks. The first element requires the owner or operator of a U.S. purse seine vessel to ensure characters of a unique code be marked indelibly on each fish aggregating device (FAD) deployed or modified on or after January 1, 2017. The vessel owner or operator must select one of the following two options for the unique code for each FAD: (1) Obtain a unique code from NMFS West Coast Region that NMFS has obtained from the IATTC Secretariat, as specified in Annex I of Resolution C-16-01 or (2) use an existing unique identifier associated with the FAD (e.g., the manufacturer identification code for the attached buoy).

The vessel owner or operator is required to ensure the characters for the unique code be at least five centimeters in height on the upper portion of the attached radio or satellite buoy in a location that does not cover the solar cells used to power the equipment. For FADs without attached radio or satellite buoys, the characters are required to be marked indelibly on the uppermost or emergent top portion of the FAD. In other words, the vessel owner or operator is required to ensure the marking is durable and will not fade or be erased (e.g., marked using an epoxy-based paint or an equivalent in terms of lasting ability) and visible at all times during daylight. In circumstances where the observer is unable to view the unique code, the captain or crew is required to assist the observer (e.g., by providing the unique code of the FAD to the observer).

The second element requires the owner or operator of a vessel to record and submit information about the FAD to the address specified by the Highly Migratory Species (HMS) Branch, Sustainable Fisheries Division, NMFS West Coast Region (Suite 4200, 501 W. Ocean Blvd., Long Beach, CA 90802). Owners and operators of a FAD are required to record this information on the standard form developed by the IATTC Secretariat and provided to the owners and operators by the HMS Branch.

The third element prohibits the crew, operator, and owner of a commercial purse seine fishing vessel of the United States used to fish for tuna or tuna-like species from retaining on board, transshipping, storing, or landing any part or whole carcass of a silky shark that is caught in the Convention Area. U.S. purse seiners do not target silky sharks, yet they are caught incidentally and are primarily discarded as discussed in the Classification Section.

The fourth element requires the crew, operator, and owner of a U.S. longline fishing vessel to limit the retention of silky sharks caught in the IATTC Convention Area to a maximum of 20 percent by weight of the total catch of fish during any fishing trip that occurred in whole or in part in the IATTC Convention Area. U.S. longline vessels fishing in the IATTC Convention Area do not target, and infrequently catch, silky sharks. Data from 2008 to 2015 show that any incidentally caught silky sharks are released, and almost all are released alive. Silky sharks are commonly released by cutting the line or dehooking the shark before it is brought onboard the vessel.

Public Comments and Responses

NMFS received one comment letter during the 30-day public comment period that closed on November 10, 2016. The comment letter was from a representative of Tri-Marine Management Company, LLC (Tri-Marine). Three distinct comments are expressed in the letter, which NMFS responds to below.

Comment 1: Unfortunately, scientific data shows total mortality of silky sharks on purse seiners still exceeds 84 percent (http://www.intres.com/articles/meps_oa/m521p143.pdf). The conservation gain of this measure will be very limited given the poor survivability of released sharks.

Response: NMFS agrees that the anticipated conservation benefit for the U.S. purse seine fleet in the eastern Pacific Ocean (EPO) following these regulations is likely minimal. As noted in the preamble of the proposed rule, silky sharks are not targeted by U.S. purse seine vessels in the EPO and they are infrequently caught. However, this is not the case in other IATTC nations, where silky sharks are retained and consumed. The IATTC scientific staff has specifically recommended prohibiting retention in purse seine fisheries, similar to the measures adopted for oceanic whitetip sharks Resolution C-11-10 (Resolution on the Conservation of Oceanic Whitetip Sharks Caught in Association with Fisheries in the Antigua Convention Area).

Although studies in the Pacific Ocean have shown that a large percentage of silky sharks do not survive after undergoing the brailing process, restrictions on retention can remove the incentive for purse seine vessels to target silky sharks. Therefore, much of the conservation benefit from this Resolution is expected from implementing this restriction by IATTC nations with vessels that target silky sharks. NMFS is implementing this provision of the Resolution to comply with U.S. obligations as a member of the IATTC.

Comment 2: While we understand and respect the conservation aim of this proposed rule, the operational implications of demonstrating full compliance were not adequately accounted for by the IATTC and should be considered by NMFS in the development and enforcement of this rule. Silky sharks are often caught unintentionally in purse seine sets on schools of tuna that are associated with FADs, and also in unassociated sets. When tuna and other non-target species are caught in purse seine sets, the net is brought alongside the vessel and everything (including silky sharks) is scooped onto the deck using a brailer. Brails are screened for non-target species like sharks when they are brought onboard. When silky sharks are seen, the crew carefully releases them overboard using best practices, which they are trained on (http://www.issfguidebooks.org/purseseine-3-14/).

Brails are large, each containing as much as seven metric tons (mt) of fish, which are conveyed quickly from the brail to the fish wells to preserve the quality of the catch. While crew, officers, and onboard observers are diligent in identifying, releasing, and logging the catch of silky sharks, there are still instances where sharks are inadvertently loaded into fish wells, especially very small sharks. In order to demonstrate full compliance with this rule, each brail would need to be examined in its entirety (e.g., dumped out on deck before being loaded into fish wells). For many vessels this is not feasible without greatly slowing operations to a point where fish quality may not meet acceptable standards.

The negative economic impacts due to slowed operations and fish waste because of poor quality would be significant. Therefore, if this proposed rule is adopted, we urge you to consider guidelines for implementation and enforcement that prohibit the intended retention of silky sharks, but do not penalize purse seine vessel operators in the rare event that silky sharks are identified at the point of offload.

Response: NMFS recognizes that methodically checking for and discarding silky sharks on the deck takes more time and effort than dropping the catch into wells without searching for sharks. However, the language in Resolution C-16-06 is not flexible enough to prohibit only the intended retention of silky sharks. The United States must implement Resolution C-16-06 to satisfy obligations as a member of the IATTC.

In addition, regulations to prohibit the retention onboard, transshipping, landing, or storing of sharks is not without precedent for purse seine vessels fishing for tuna in the Pacific Ocean. Many of the large U.S. purse seine vessels that could catch silky sharks also fish in the western and central Pacific Ocean and are subject to NMFS regulations at 50 CFR 300.226 that prohibit the retention of silky sharks in those waters (without an exception for unintentional retention). Therefore, the practice is feasible. U.S. purse seine vessels in the EPO are also subject to regulations at 50 CFR 300.27, which already prohibit retention of oceanic whitetip shark (without an exception for unintentional retention), which presumably present the same feasibility issues.

Comment 3: We encourage NMFS to promote more effective conservation measures for silky sharks at the IATTC, such as a measure that would require the fins of any sharks landed in any fishery in the Convention Area to be naturally attached rather than applying a fins-to-carcass ratio. In addition, we recognize that the catch of silky sharks is higher in FAD sets than in unassociated sets, and are highly supportive of scientifically based, equitably applied, FAD management.

Response: NMFS agrees with the commenter's suggestion to pursue shark measures in the IATTC that would prohibit landing with fins-attached. Such proposals have been tabled for consideration by the IATTC since 2012, and the United States has strongly supported these proposals.

Changes From the Proposed Rule

With the exception of a non-substantive adjustment to the wording of the new definition “HMS Branch” in 50 CFR 300.21, there are no changes to the regulatory text in the final rule from the proposed rule.

Classification

The NMFS Assistant Administrator has determined that this proposed rule is consistent with the Tuna Conventions Act and other applicable laws.

This action is categorically excluded from the requirement to prepare an Environmental Assessment in accordance with NOAA Administrative Order (NAO) 216-6. A memorandum for the file has been prepared that sets forth the decision to use a categorical exclusion, and a copy is available from NMFS (see ADDRESSES).

This rule has been determined to be not significant for purposes of Executive Order 12866.

This rule contains a collection-of-information requirement subject to the Paperwork Reduction Act (PRA) and which has been approved by OMB Control Number 0648-0148. NMFS amended an existing supporting statement for the Pacific Tuna Fisheries Logbook to include the data collection requirements for FADs, as described in this rule. Public reporting burden for the additional collection of information is estimated to average ten minutes per form, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate, or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see ADDRESSES) and by email to OIRA_Submission@omb.eop.gov, or fax to (202) 395-5806.

Regarding the elements of the rule pertaining to silky sharks; there are no new collection-of-information requirements associated with this action that are subject to the PRA, and existing collection-of-information requirements still apply under the following Control Numbers: 0648-0593 and 0648-0214.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number. All currently approved NOAA collections of information may be viewed at: http://www.cio.noaa.gov/services_programs/prasubs.html.

The Chief Counsel for Regulation, Office of the General Counsel, Department of Commerce, determined that this rule would not have a significant economic impact on a substantial number of small entities. Although an Initial Regulatory Flexibility Analysis (IRFA) was published to aid the public in commenting upon the small business impact of the proposed regulations, that analysis concluded that the action will not have a significant adverse economic impact on a substantial number of small entities. Public comment was solicited on the IRFA and proposed rule, and no challenges to the conclusions or other substantive issues in the IRFA were received through public comment. Accordingly, a Final Regulatory Flexibility Analysis was not prepared. Because the actions contained in this final rule are not expected to have a significant economic impact on a substantial number of small entities, the Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule will not have a significant adverse impact on a substantial number of small entities. The factual basis for this determination is described below.

As described in the SUPPLEMENTARY INFORMATION section, the regulations require FAD identification and data reporting as well as fishing restrictions on silky sharks. The entities directly affected by the actions of this final rule are (1) U.S. purse seine vessels that use FADs to fish for tuna or tuna-like species in the IATTC Convention Area, and (2) U.S. purse seine and longline vessels that catch silky sharks.

The United States Small Business Administration (SBA) defines a “small business” (or “small entities”) as one with annual revenue that meets or is below an established size standard. On December 29, 2015, NMFS issued a final rule establishing a small business size standard of $11 million in annual gross receipts for all businesses primarily engaged in the commercial fishing industry (NAICS 11411) for Regulatory Flexibility Act (RFA) compliance purposes only (80 FR 81194; December 29, 2015). The $11 million standard became effective on July 1, 2016, and is to be used in place of the U.S. SBA current standards of $20.5 million, $5.5 million, and $7.5 million for the finfish (NAICS 114111), shellfish (NAICS 114112), and other marine fishing (NAICS 114119) sectors of the U.S. commercial fishing industry in all NMFS rules subject to the RFA after July 1, 2016. Id. at 81194. The new standard results in fewer commercial finfish businesses being considered small.

NMFS prepared analyses for this regulatory action in light of the new size standard. All of the entities directly regulated by this regulatory action are commercial finfish fishing businesses. Under the new size standards, the entities for which the action on FADs applies are considered large and small business, and the longline vessels for which the action on silky sharks applies to be small business.

As of July 2016, there are 15 large purse seine vessels (with at least 363 mt of fish hold volume) listed on the IATTC Regional Vessel Register. The number of U.S. large purse seine vessels on the IATTC Regional Vessel Register has increased substantially in the past two years due to negotiations regarding the South Pacific Tuna Treaty (SPTT) and the interest expressed by vessel owners that typically fish in the western and central Pacific Ocean (WCPO) in relocating to the EPO. Neither gross receipts nor ex-vessel price information specific to individual fishing vessels are available to NMFS, so NMFS applied indicative regional cannery prices—as approximations of ex-vessel prices—to annual catches of individual vessels to estimate their annual receipts. Indicative regional cannery prices are available through 2014 (developed by the Pacific Islands Forum Fisheries Agency; available at https://www.ffa.int/node/425). NMFS estimated vessels' annual receipts during 2012-2014. Using this approach, NMFS estimates that among the affected vessels, the range in annual average receipts in 2012-2014 was $3 million to $20 million and the median was about $13 million. Thus, NMFS estimates that slightly more than half of the affected large purse seine vessels are small entities.

Because only the large purse seine vessels fish with FADs and incidentally catch silky sharks in the EPO, the action is not expected to impact the coastal purse seine vessels. U.S. purse seiners do not target silky sharks in the EPO. Since 2005, the best available data from observers show that the incidental catches of silky sharks are primarily discarded. However, a small percentage has been landed in the past ten years. For example, in 2015, a year in which more than three large purse seine vessels fished in the EPO, about 3 percent of the total catches of silky sharks were landed and the rest were discarded either dead or alive. Since at least 2005, the observer coverage rate on class size 6 vessels in the EPO has been 100 percent.

As of August 2016, the IATTC Regional Vessel Register lists 158 U.S. longline vessels that have the option to fish in the IATTC Convention Area. The majority of these longline vessels possess Hawaii Longline Limited Access Permits (issued under 50 CFR 665.13). In addition, there are U.S. longline vessels based on the U.S. West Coast, some of which operate solely under the Pacific HMS permit. U.S. West Coast-based longline vessels operating under the Pacific HMS permit fish primarily in the EPO and are currently restricted to fishing with deep-set longline gear outside of the U.S. West Coast exclusive economic zone (EEZ).

There have been less than three West Coast-based vessels operating under the HMS permit since 2005. Therefore, landings and ex-vessel revenue are confidential. However, the number of Hawaii-permitted longline vessels that have landed in West Coast ports has increased from 1 vessel in 2006 to 14 vessels in 2014. In 2014, 621 mt of highly migratory species were landed by Hawaii permitted longline vessels with an average ex-vessel revenue of approximately $247,857 per vessel. For the longline fishery, the ex-vessel value of catches by the Hawaii longline fleet in 2012 was about $87 million. With 129 active vessels in that year, per-vessel average revenues were about $0.7 million, well below the $11 million threshold for finfish harvesting businesses. NMFS considers all longline vessels, for which data is non-confidential, that catch silky sharks in the IATTC Convention Area to be small entities for the purposes of the RFA.

U.S. longline vessels fishing in the IATTC Convention Area, whether under the Hawaii Longline Limited Access Permit or the Pacific HMS permit, do not target silky sharks and all those caught incidentally are released. An evaluation of total catch per longline trip where silky sharks have been caught and released shows that, if the average weights of silky sharks are approximated, the amount of silky sharks caught by U.S. longline vessels fishing in the EPO do not come close to 20 percent by weight of the total catch of fish during a fishing trip.

An IRFA was prepared for the proposed rule, and the analysis concluded that the action will not have a significant adverse economic impact on a substantial number of small entities. Under the new size standards, the entities impacted by the action on FADs are considered large and small business. However, a disproportional economic effect between small and large businesses is not expected. There will be only a minimal additional time burden for owners and operators of large purse seine vessels to ensure characters of a unique code be marked indelibly on their FADs and to record data for FAD activities. And while the large purse seine vessels impacted by the actions with respect to treatment of silky sharks would be required to release all silky sharks, U.S. purse seine vessels do not target silky sharks, and primarily release those caught incidentally. However, there may be some modifications to the fishing practices of these large and small entities to release all catch of silky sharks. NMFS considers the longline vessels for which the action on silky sharks applies to be small entities. U.S. longline vessels fishing in the EPO do not target silky sharks and release all those incidentally caught. U.S. longline vessels only occasionally catch a small amount of silky sharks on fishing trips in the EPO. Therefore, this action is not expected to impact the fishing practices of these longline vessels.

Thus, these actions are not expected to substantially change the typical fishing practices of affected vessels. In addition, any impact to the income of U.S. vessels would be minor. Therefore, NMFS has determined that the action is not expected to have a significant economic impact on a substantial number of small entities. The action will also not have a disproportional economic impact on small business entities.

(ee) Fail to ensure characters of a unique code are marked indelibly on a FAD deployed or modified on or after January 1, 2017, in accordance with § 300.25(h).

(ff) Fail to record and report data on interactions or activities on FADs as required in § 300.25(i).

(gg) Use a commercial purse seine fishing vessel of the United States to retain on board, transship, store, or land any part or whole carcass of a silky shark (Carcharhinus falciformis) in contravention of § 300.27(e).

(hh) Use a U.S. longline vessel to catch silky shark in contravention of § 300.27(f).

4. In § 300.25:a. In paragraph (g)(4), remove “(h)(1) and (2)” and “(h)(5)” and add in their place “(g)(1) and (2)” and “(g)(5)”;b. In paragraph (g)(5), remove “(h)(4)” and add in its place “(g)(4)”; andc. Add paragraphs (h) and (i).

The additions read as follows:

§ 300.25 Eastern Pacific fisheries management.

(h) FAD identification requirements for purse seine vessels. (1) For each FAD deployed or modified on or after January 1, 2017, in the IATTC Convention Area, the vessel owner or operator must either: Obtain a unique code from HMS Branch; or use an existing unique identifier associated with the FAD (e.g., the manufacturer identification code for the attached buoy).

(2) U.S. purse seine vessel owners and operators shall ensure the characters of the unique code or unique identifier be marked indelibly at least five centimeters in height on the upper portion of the attached radio or satellite buoy in a location that does not cover the solar cells used to power the equipment. For FADs without attached radio or satellite buoys, the characters shall be on the uppermost or emergent top portion of the FAD. The vessel owner or operator shall ensure the marking is visible at all times during daylight. In circumstances where the on-board observer is unable to view the code, the captain or crew shall assist the observer (e.g., by providing the FAD identification code to the observer).

(i) FAD data reporting for purse seine vessels. U.S. vessel owners and operators must ensure that any interaction or activity with a FAD is reported using a standard format provided by the HMS Branch. The owner and operator shall ensure that the form is submitted to the address specified by the HMS Branch.

(e) Silky shark restrictions for purse seine vessels. The crew, operator, and owner of a commercial purse seine fishing vessel of the United States used to fish for tuna or tuna-like species is prohibited from retaining on board, transshipping, storing, or landing any part or whole carcass of a silky shark (Carcharhinus falciformis) that is caught in the Convention Area.

(f) Silky shark restrictions for longline vessels. The crew, operator, and owner of a longline vessel of the United States used to fish for tuna or tuna-like species must limit the retained catch of silky sharks caught in the IATTC Convention Area to a maximum of 20 percent in weight of the total catch during each fishing trip that occurs in whole or in part in the IATTC Convention Area.

[FR Doc. 2016-28968 Filed 12-1-16; 8:45 am] BILLING CODE 3510-22-PDEPARTMENT OF COMMERCENational Oceanic and Atmospheric Administration50 CFR Part 622[Docket No. 120815345-3525-02]RIN 0648-XF046Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Re-Opening of Recreational Sector for the South Atlantic Other Jacks ComplexAGENCY:

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Temporary rule; re-opening.

SUMMARY:

NMFS announces the re-opening of the recreational sector for the other jacks complex (lesser amberjack, almaco jack, and banded rudderfish) in the exclusive economic zone (EEZ) of the South Atlantic through this temporary rule. The most recent recreational landings of the other jacks complex indicate that the recreational annual catch limit (ACL) for 2016 fishing year has not yet been reached. Therefore, NMFS re-opens the recreational sector for the other jacks complex in the South Atlantic EEZ through the end of the 2016 fishing year or until the ACL is reached, whichever happens first, to allow the recreational ACL to be caught, while minimizing the risk of the recreational ACL being exceeded.

DATES:

This rule is effective 12:01 a.m., local time, December 2, 2016, until 12:01 a.m., local time, January 1, 2017.

The snapper-grouper fishery of the South Atlantic includes the other jacks complex which is composed of lesser amberjack, almaco jack, and banded rudderfish and is managed under the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (FMP). The FMP was prepared by the South Atlantic Fishery Management Council and is implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

The recreational ACL for other jacks complex in the South Atlantic is 267,799 lb (121,472 kg), round weight. Under 50 CFR 622.193(l)(2)(i), NMFS is required to close the recreational sector for the other jacks complex when landings reach, or are projected to reach, the recreational ACL by filing a notification to that effect with the Office of the Federal Register.

NMFS previously projected that the recreational ACL for the South Atlantic other jacks complex for the 2016 fishing year would be reached by August 9, 2016. Accordingly, NMFS published a temporary rule in the Federal Register to implement accountability measures (AMs) to close the recreational sector for the other jacks complex in the South Atlantic EEZ effective from August 9, 2016, until the start of the 2017 fishing year on January 1, 2017 (81 FR 52366, August 8, 2016).

However, the most recent landings data for the other jacks complex now indicate the recreational ACL has not been reached. Consequently, and in accordance with 50 CFR 622.8(c), NMFS temporarily re-opens the recreational sector for the other jacks complex on December 2, 2016. The recreational sector will remain open through the remainder of 2016 fishing year or until the recreational ACL is reached, whichever happens first. Re-opening the recreational sector allows for an additional opportunity to recreationally harvest the other jacks complex while minimizing the risk of the recreational ACL being exceeded.

Classification

The Regional Administrator, NMFS Southeast Region, has determined this temporary rule is necessary for the conservation and management of the other jacks complex and the South Atlantic snapper-grouper fishery and is consistent with the Magnuson-Stevens Act and other applicable laws.

This action is taken under 50 CFR 622.8(c) and is exempt from review under Executive Order 12866.

These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

This action responds to the best scientific information available. The Assistant Administrator for NOAA Fisheries (AA), finds that the need to immediately implement this action to temporarily re-open the recreational sector for the other jacks complex constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B), as such procedures are unnecessary and contrary to the public interest. Such procedures are unnecessary because the rule implementing the recreational ACL and AMs has been subject to notice and comment, and all that remains is to notify the public of the re-opening. Such procedures are contrary to the public interest because of the need to immediately implement this action to allow recreational fishers to harvest the recreational ACL of species of the other jacks complex from the EEZ. Prior notice and opportunity for public comment would require time and would delay the re-opening of the recreational sector.

For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Final rule.

SUMMARY:

NMFS issues regulations to implement management measures described in Amendment 45 to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP), as prepared by the Gulf of Mexico Fishery Management Council (Council) (Amendment 45). This final rule extends the 3-year sunset provision for the Gulf of Mexico (Gulf) red snapper recreational sector separation measures for an additional 5 years. Additionally, this rule corrects an error in the Gulf red snapper recreational accountability measures (AMs). The purpose of this final rule is to extend the sector separation measures to allow the Council more time to consider and possibly develop alternative management strategies within the Gulf red snapper recreational sector.

DATES:

This final rule is effective January 3, 2016.

ADDRESSES:

Electronic copies of Amendment 45, which includes an environmental assessment, a fishery impact statement, a Regulatory Flexibility Act (RFA) analysis, and a regulatory impact review, may be obtained from the Southeast Regional Office Web site at http://sero.nmfs.noaa.gov.

NMFS and the Council manage the Gulf reef fish fishery, which includes red snapper, under the FMP. The Council prepared the FMP and NMFS implements the FMP through regulations at 50 CFR part 622 under the authority of the Magnuson Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

On August 25, 2016, NMFS published a notice of availability for Amendment 45 and requested public comment (81 FR 58466). On September 8, 2016, NMFS published a proposed rule for Amendment 45 and requested public comment (81 FR 62069). The proposed rule and Amendment 45 outline the rationale for the action contained in this final rule. A summary of the management measures described in Amendment 45 and implemented by this final rule is provided below.

Management Measure Contained in This Proposed Rule

Amendment 45 extends the 3-year sunset provision implemented through the final rule for Amendment 40 to the FMP (80 FR 22422, April 22, 2015) for an additional 5 years. Amendment 40 established distinct private angling and Federal for-hire (charter vessel and headboat) components of the Gulf reef fish recreational sector fishing for red snapper, and allocated red snapper resources between these recreational components. The purpose of establishing these separate recreational components was to provide a basis for increasing the stability for the for-hire component and the flexibility in future management of the recreational sector, and to reduce the likelihood of recreational red snapper quota overruns, which could jeopardize the rebuilding of the red snapper stock (the Gulf red snapper stock is currently overfished and is under a rebuilding plan). As a result of the stock status, the actions in Amendment 40 were also intended to prevent overfishing while achieving optimum yield, particularly with respect to recreational fishing opportunities, and while rebuilding the red snapper stock.

Amendment 40 defined the Federal for-hire component as including operators of vessels with Federal charter vessel/headboat permits for Gulf reef fish and their angler clients. The private angling component was defined as including anglers fishing from private vessels and state-permitted for-hire vessels. Amendment 40 also established accountability measures for the Gulf red snapper recreational components. In addition, Amendment 40 applied a 3-year sunset provision for the regulations implemented through its final rule. The sunset provision maintained the measures for sector separation through the end of the 2017 fishing year, ending on December 31, 2017.

This final rule extends Gulf recreational red snapper sector separation through the end of the 2022 fishing year, ending on December 31, 2022, rather than the current sunset date of December 31, 2017. Beginning on January 1, 2023, the red snapper recreational sector will be managed as a single entity without the separate Federal for-hire and private angling components. The Council would need to take further action for these recreational components and management measures to extend beyond the 5-year extension in Amendment 45.

Additionally, as a result of extending the sunset provision for sector separation, this final rule extends the respective red snapper recreational component quotas and ACTs through the 2022 fishing year, instead of through the 2017 fishing year as implemented through Amendment 40.

Comments and Responses

A total of 115 comments were received on the notice of availability and proposed rule for Amendment 45. Most of the comments (91 comments), including one from a recreational fishing organization, were not in favor of extending the sunset provision from Amendment 40. The primary reason given was an opposition to sector separation implemented through Amendment 40, including: The concern that sector separation was unfair to private anglers, particularly with respect to fishing season length in Federal waters; the position that all recreational fishermen, regardless of whether they use a private vessel or a for-hire vessel to harvest red snapper, should be managed under the same regulations; and opposition to any part of the recreational quota being privatized. These comments are duplicative of those provided on Amendment 40 and were addressed in the final rule implementing Amendment 40 (80 FR 22422, April 22, 2015). Those responses to comments are incorporated here by reference.

Other comments in opposition to Amendment 45 and the proposed rule expressed a preference for recreational red snapper fishing to be managed by the Gulf states or managed through the use of fish tags, or expressed opposition to the Federal for-hire component being managed under a catch share program in the future. These comments are outside the scope of Amendment 45. Amendment 45 only addresses extending Amendment 40's sunset provision, not the strategies or measures under which the separate components of the recreational sector may be managed.

Fifteen comments were received in favor of extending the sunset provision. Rationale in support included: That extending the sunset provides more time to develop Federal for-hire red snapper management measures, and that sector separation is providing a longer Federal season for operators of federally permitted for-hire reef fish vessels. Eight comments did not indicate whether they were for or against extending the sunset provision and one comment from a Federal agency indicated they had no comments on Amendment 45 or the proposed rule.

Comment 1: The Council, when approving Amendment 40, established a 3-year sunset provision to ensure that the Council would evaluate the merits of sector separation within a specific time period. Extending sector separation now, before the Council has evaluated sector separation, violates the Council's intent to consider the merits of sector separation over the 3-year evaluation period.

Response: NMFS disagrees. As stated in the final rule for Amendment 40 (80 FR 22422, April 22, 2015), the purpose of separating the recreational sector into components was to provide a basis for increased flexibility in future management of the recreational sector and reduce the likelihood of recreational quota overruns, which could negatively impact the rebuilding of the red snapper stock. As described in Amendment 40, the Council established the 3-year sunset provision to encourage timely action to implement and evaluate alternative management structures. If such structures were under development, the Council also would have the opportunity to determine whether to to extend sector separation to continue to develop those structures or instead to let sector separation end under the sunset provision.

The Council is working toward developing altnerative management structures and will continue to evaluate sector separation as these structures develop. In view of its work on those structures, chose to extend the sunset provision to continue that work. Amendment 40 represented the first step toward developing alternative structures to manage the recreational sector. Since Amendment 40 was implemented, the Council has established three ad hoc advisory panels (APs) to help it develop management alternatives for recreational red snapper management in the Gulf. The Ad Hoc Red Snapper Charter For-hire AP and the Ad Hoc Reef Fish Headboat AP have convened on several occasions and are assisting the Council in developing management actions for their respective fishing modes. The Council also recently established the Ad Hoc Red Snapper Private Angler AP, which it charged with providing recommendations on private recreational red snapper management measures that would provide more quality access to the red snapper resource in Federal waters, reduce discards, and improve fisheries data collection. This AP has yet to meet.

Although the Council is making progress in its efforts to develop alternative red snapper recreational management measures, it is unlikely that the Council, with help from its APs, will approve any management measures prior to January 1, 2018, when Amendment 40 expires under the current sunset provision. Therefore, the Council decided to take action through Amendment 45 to extend the sunset provision for an additional 5-year period to give it additional time to develop the future red snapper management measures contemplated under Amendment 40. Extending the sunset provision in this final rule is consistent with the intent behind including the sunset provision in Amendment 40 as it provides the Council with additional time to develop alternative management structures and to continue to consider the merits of sector separation over an additional 5 years. Because of the time it would take to develop and implement an amendment to extend the sunset time period, rather than waiting any longer into the sunset period, the Council chose to act now to extend sector separation for an additional 5 years, and its action is consistent with the intent in including the sunset provision in Amendment 40.

Comment 2: Sector separation should not be extended for an additional 5 years because sector separation disproportionately harms private anglers by reducing the length of their Federal season; unreasonably creates a different set of rules for each recreational component fishing under the same recreational quota; is not based on the best scientific information available; creates derby-like conditions for the private angler component; allows the privatization of a portion of the recreational quota; and it is premature to extend sector separation before the litigation concerning sector separation is resolved.

Response: NMFS disagrees. The Council approved Amendment 40 and submitted the amendment to NMFS for review and Secretarial approval. During this process, NMFS received many comments in opposition to sector separation citing the same substantive reasons as those received on Amendment 45 and proposed rule. Responses to these comments are contained in the final rule for Amendment 40 (80 FR 22422, April 22, 2015) and are incorporated here by reference. In those responses, NMFS explained why it believed sector separation was appropriate. The Council chose to extend sector separation despite the concerns with sector separation itself and NMFS is approving that decision for the same reasons we approved Amendment 40.

With respect to the comment that it is premature to extend sector separation until the litigation concerning sector separation is resolved, NMFS disagrees. The final rule implementing Amendment 40 was challenged in both the United States District Court for the Eastern District of Louisiana, Coastal Conservation Ass'n v. United States Department of Commerce, No. 2:15-cv-01300, and in the United States District Court for the Middle District of Florida, The Fishing Rights Alliance, Inc. v. Pritzker, No. 8:15-cv-01254. On January 5, 2016, the United States District Court for the Eastern District of Louisiana ruled in favor of NMFS, dismissing the matter with prejudice. That decision is on appeal to the United States Court of Appeals for the Fifth Circuit and oral argument was held on November 1, 2016, Coastal Conservation Ass'n v. United States Department of Commerce, No. 16-30137. The other action is still pending. NMFS does not need to await the outcome of these legal challenges before approving the Council's decision to extend sector separation for an additional 5 years under Amendment 45. Amendment 40 continues to be valid and enforceable until a court rules to the contrary. Depending on the outcome of those challenges, the Council may revisit sector separation, as appropriate.

Additional Changes to Codified Text

On May 1, 2015, NMFS published the final rule for a framework action to revise the Gulf red snapper commercial and recreational quotas and ACTs, including the recreational component ACTs, and to announce the closure dates for the recreational sector components for the 2015 fishing year (80 FR 24832). However, during the implementation of the framework action, the term and regulatory reference for total recreational quota was inadvertently used instead of total recreational ACT when referring to the applicability of the recreational component ACTs after sector separation ends in § 622.41(q)(2)(iii)(B) and (C). This rule corrects this error by revising the text and regulatory references within the component ACTs in § 622.41(q)(2)(iii)(B) and (C) to reference the total recreational sector ACT instead of the total recreational quota.

Classification

The Regional Administrator, Southeast Region, NMFS has determined that this final rule is consistent with Amendment 45, the FMP, the Magnuson-Stevens Act, and other applicable law.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The Magnuson-Stevens Act provides the statutory basis for this rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting, record-keeping, or other compliance requirements are introduced by this final rule.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this rule would not have a significant economic impact on a substantial number of small entities. The factual basis for this determination was published in the proposed rule and is not repeated here. No significant issues were received regarding the certification by public comments on the proposed rule, no changes were made to the rule in response to such comments, and NMFS has not received any new information that would affect its determination. As a result, a final regulatory flexibility analysis is not required and none was prepared.

(B) Federal charter vessel/headboat component quota. The Federal charter vessel/headboat component quota applies to vessels that have been issued a valid Federal charter vessel/headboat permit for Gulf reef fish any time during the fishing year. This component quota is effective for only the 2015 through 2022 fishing years. For the 2023 and subsequent fishing years, the applicable total recreational quota, specified in paragraph (a)(2)(i)(A) of this section, will apply to the recreational sector.

(1) For fishing year 2015—2.964 million lb (1.344 million kg), round weight.

(2) For fishing year 2016—3.042 million lb (1.380 million kg), round weight.

(3) For fishing years 2017 through 2022—2.993 million lb (1.358 million kg), round weight.

(C) Private angling component quota. The private angling component quota applies to vessels that fish under the bag limit and have not been issued a Federal charter vessel/headboat permit for Gulf reef fish any time during the fishing year. This component quota is effective for only the 2015 through 2022 fishing years. For the 2023 and subsequent fishing years, the applicable total recreational quota, specified in paragraph (a)(2)(i)(A) of this section, will apply to the recreational sector.

(1) For fishing year 2015—4.043 million lb (1.834 million kg), round weight.

(2) For fishing year 2016—4.150 million lb (1.882 million kg), round weight.

(3) For fishing years 2017 through 2022—4.083 million lb (1.852 million kg), round weight.

(B) Federal charter vessel/headboat component ACT. The Federal charter vessel/headboat component ACT applies to vessels that have been issued a valid Federal charter vessel/headboat permit for Gulf reef fish any time during the fishing year. This component ACT is effective for only the 2015 through 2022 fishing years. For the 2023 and subsequent fishing years, the applicable total recreational ACT, specified in paragraph (q)(2)(iii)(A) of this section, will apply to the recreational sector.

(1) For fishing year 2015—2.371 million lb (1.075 million kg), round weight.

(2) For fishing year 2016—2.434 million lb (1.104 million kg), round weight.

(3) For fishing years 2017 through 2022—2.395 million lb (1.086 million kg), round weight.

(C) Private angling component ACT. The private angling component ACT applies to vessels that fish under the bag limit and have not been issued a Federal charter vessel/headboat permit for Gulf reef fish any time during the fishing year. This component ACT is effective for only the 2015 through 2022 fishing years. For the 2023 and subsequent fishing years, the applicable total recreational ACT, specified in paragraph (q)(2)(iii)(A) of this section, will apply to the recreational sector.

(1) For fishing year 2015—3.234 million lb (1.467 million kg), round weight.

(2) For fishing year 2016—3.320 million lb (1.506 million kg), round weight.

(3) For fishing years 2017 through 2022—3.266 million lb (1.481 million kg), round weight.

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Temporary rule; closure.

SUMMARY:

NMFS implements accountability measures (AMs) for Atlantic migratory group cobia that are sold (commercial) and harvested from the exclusive economic zone (EEZ) of the Atlantic. NMFS projects that commercial landings of Atlantic migratory group cobia have reached the commercial quota. Therefore, NMFS closes the commercial sector for Atlantic migratory group cobia on December 6, 2016, and it will remain closed until the start of the next fishing year on January 1, 2017. This closure is necessary to protect the resource of Atlantic migratory group cobia.

DATES:

This rule is effective from 12:01 a.m., local time, December 6, 2016, until 12:01 a.m., local time, January 1, 2017.

The fishery for coastal migratory pelagic fish includes king mackerel, Spanish mackerel, and cobia, and is managed under the Fishery Management Plan for Coastal Migratory Pelagic Resources in the Gulf of Mexico and Atlantic Region (FMP). The FMP was prepared by the Gulf of Mexico and South Atlantic Fishery Management Councils and is implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

Separate migratory groups of cobia were established in Amendment 18 to the FMP (76 FR 82058, December 29, 2011), and then revised in Amendment 20B to the FMP (80 FR 4216, January 27, 2015). The southern boundary for Atlantic migratory group cobia occurs at a line that extends due east of the Florida and Georgia state border at 30°42′45.6″ N. lat. The northern boundary for Atlantic migratory group cobia is the jurisdictional boundary between the Mid-Atlantic and New England Fishery Management Councils, as specified in 50 CFR 600.105(a).

Atlantic migratory group cobia are unique among federally managed species in the southeast region, because no Federal commercial permit is required to harvest and sell them. The distinction between commercial and recreational sectors is not as clear as other federally managed species in the southeast region. For example, regulations at 50 CFR part 622 specify quotas, annual catch limits, and AMs for cobia that are sold and cobia that are not sold. However, for purposes of this temporary rule, Atlantic migratory group cobia that are sold are considered commercially-caught, and those that are not sold are considered recreationally-caught.

The commercial quota for Atlantic migratory group cobia is 50,000 lb (22,680 kg), round or gutted weight, for the 2016 fishing year, from January 1 through December 31, as specified in 50 CFR 622.384(d)(2).

The AMs for the commercial sector of Atlantic migratory group cobia, specified at 50 CFR 622.388(f)(1)(i), require that NMFS file a notification with the Office of the Federal Register to prohibit the sale and purchase of cobia for the remainder of the fishing year if commercial landings reach or are projected to reach the commercial quota specified in § 622.384(d)(2). The commercial AM is triggered for 2016, because NMFS projects that commercial landings of Atlantic migratory group cobia have reached the commercial quota. Accordingly, the commercial sector for Atlantic migratory group cobia is closed at 12:01 a.m., local time, on December 6, 2016, and remains closed until 12:01 a.m., local time, January 1, 2017.

During the commercial closure, the sale and purchase of Atlantic migratory group cobia is prohibited. Additionally, on June 20, 2016, NMFS closed the recreational sector for Atlantic migratory group cobia for the remainder of the 2016 fishing year, because the recreational annual catch target was projected to be reached (81 FR 12601, March 10, 2016). Therefore, the possession limit for recreational Atlantic migratory group cobia is zero for the remainder of the 2016 fishing year. The prohibition on sale and purchase does not apply to Atlantic migratory group cobia that were harvested, landed ashore, and sold prior to 12:01 a.m., local time, December 6, 2016, and were held in cold storage by a dealer or processor.

The commercial and recreational sectors for Atlantic migratory group cobia will re-open at the beginning of the 2017 fishing year on January 1, 2017.

Classification

The Regional Administrator for the NMFS Southeast Region has determined this temporary rule is necessary for the conservation and management of Atlantic migratory group cobia and is consistent with the Magnuson-Stevens Act and other applicable laws.

This action is taken under 50 CFR 622.388(f)(1)(i) and is exempt from review under Executive Order 12866.

These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

This action is based on the best scientific information available. The Assistant Administrator for NOAA Fisheries finds good cause to waive the requirements to provide prior notice and opportunity for public comment, pursuant to the authority set forth at 5 U.S.C. 553(b)(B), as such prior notice and opportunity for public comment is unnecessary and contrary to the public interest. Such procedures are unnecessary because the AMs for Atlantic migratory group cobia have already been subject to notice and comment, and all that remains is to notify the public of the commercial closure for the remainder of the 2016 fishing year. Prior notice and opportunity for public comment on this action would be contrary to the public interest, because of the need to immediately implement the commercial closure to protect Atlantic migratory group cobia, since the capacity of the fishing fleet allows for rapid harvest of the commercial quota. Prior notice and opportunity for public comment would require time and would potentially result in a harvest that exceeds the commercial quota.

For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

We propose to adopt a new airworthiness directive (AD) for all Airbus Model A321 series airplanes. This proposed AD was prompted by a determination from fatigue testing on the Model A321 airframe that cracks could develop on holes at certain fuselage frame locations. This proposed AD would require repetitive inspections for cracking on holes at certain fuselage frame locations, and repairs if necessary. We are proposing this AD to prevent the unsafe condition on these products.

DATES:

We must receive comments on this proposed AD by January 17, 2017.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9431; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-9431; Directorate Identifier 2016-NM-104-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2016-0106, dated June 6, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on all Airbus Model A321 series airplanes. The MCAI states:

Following a new full scale fatigue test campaign on the A321 airframe, in the context of the A321 extended service goal, it was identified that cracks could develop on holes at frame (FR) 35.2A between stringers (STR) 22 and STR 23 on right hand (RH) and left hand (LH) sides, also on aeroplanes operated in the context of design service goal.

This condition, if not detected and corrected, could reduce the structural integrity of the fuselage.

Prompted by these findings, Airbus developed an inspection programme, published in Service Bulletin (SB) A320-53-1315 and SB A320-53-1316, each containing instructions for a different location.

For the reasons described above, this [EASA] AD requires repetitive special detailed (rototest) inspections (SDI) of the affected holes [for cracking] and, depending on findings, accomplishment of a repair.

This [EASA] AD is considered an interim action, pending development of a permanent solution.

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9431.

Related Service Information Under 1 CFR Part 51

Airbus has issued Service Bulletin A320-53-1315, dated January 13, 2016; and Service Bulletin A320-53-1316, dated January 13, 2016. This service information describes procedures for doing a special detailed inspection for cracking at the tooling holes on FR 35.2A between STR 22 and STR 23 and repairs. These documents are distinct since they apply to different sides of the airplane. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination and Requirements of This Proposed AD

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

Costs of Compliance

We estimate that this proposed AD affects 175 airplanes of U.S. registry.

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

Regulatory Findings

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD was prompted by a determination from fatigue testing on the Model A321 airframe that cracks could develop on holes at certain fuselage frame locations. We are issuing this AD to detect and correct cracking at certain hole locations in the fuselage frame, which could result in reduced structural integrity of the airplane.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Repetitive Inspections

At the later of the times specified in paragraphs (g)(1) and (g)(2) of this AD: Do a special detailed (rototest) inspection for cracking of the affected holes at frame 35.2A on the left-hand side and right-hand side between stringer 22 and stringer 23, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-53-1315, dated January 13, 2016 (right-hand side); and Airbus Service Bulletin A320-53-1316, dated January 13, 2016 (left-hand side). Repeat the inspection of the affected holes thereafter at intervals not to exceed 21,500 flight cycles or 43,100 flight hours, whichever occurs first.

(1) Before exceeding 25,400 total flight cycles or 50,900 total flight hours since first flight of the airplane, whichever occurs first.

(2) Within 3,300 flight cycles after the effective date of this AD.

(h) Repair

If any crack is found during any inspection required by paragraph (g) of this AD: Before further flight, repair using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA). Although the service information specified in paragraph (g) of this AD specifies to contact Airbus for repair instructions, and specifies that action as “RC” (Required for Compliance), this AD requires repair as specified in this paragraph. Repair of an airplane as required by this paragraph does not constitute terminating action for the repetitive actions required by paragraph (g) of this AD, unless specified otherwise in the instructions provided by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA.

(i) Other FAA AD Provisions

The following provisions also apply to this AD:

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Sanjay Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1405; fax 425-227-1149. Information may be emailed to: 9-ANM-116-AMOC-REQUESTS@faa.gov. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

(3) Required for Compliance (RC): Except as required by paragraph (h) of this AD: If any service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

(j) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2016-0106, dated June 6, 2016, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9431.

We propose to adopt a new airworthiness directive (AD) for all The Boeing Company Model 747-400, 747-400D, and 747-400F airplanes. This proposed AD was prompted by a report of a 13.4-inch crack in the left wing front spar web inboard of pylon number 2 between front spar station inboard (FSSI) 655.75 and FSSI 660, found following a fuel leak. This proposed AD would require repetitive detailed, ultrasonic, and high frequency eddy current inspections for cracking of the front spar web between FSSI 628 and FSSI 713, and repairs if necessary. We are proposing this AD to address the unsafe condition on these products.

DATES:

We must receive comments on this proposed AD by January 17, 2017.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

For service information identified in this NPRM, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740; telephone 562-797-1717; Internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9394.

Examining the AD Docket

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9394; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-9394; Directorate Identifier 2016-NM-162-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

Discussion

We have received a report indicating that a fuel leak in one airplane led to the discovery of a 13.4-inch crack in the left wing front spar web inboard of pylon number 2 between FSSI 655.75 and FSSI 660. The airplane had accumulated 13,909 total flight cycles and 107,151 total flight hours. This condition, if not corrected, could result in fuel leaks and a consequent fire.

Related Service Information Under 1 CFR Part 51

We reviewed Boeing Alert Service Bulletin 747-57A2357, dated September 12, 2016. The service information describes procedures for repetitive detailed, ultrasonic, and high frequency eddy current inspections, and repairs of cracking of the front spar web between FSSI 628 and FSSI 713. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

Proposed AD Requirements

This proposed AD would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between this Proposed AD and the Service Information.” For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9394.

Differences Between This Proposed AD and the Service Information

Boeing Alert Service Bulletin 747-57A2357, dated September 12, 2016, specifies to contact the manufacturer for certain instructions, but this proposed AD would require using repair methods, modification deviations, and alteration deviations in one of the following ways:

• In accordance with a method that we approve; or

• Using data that meet the certification basis of the airplane, and that have been approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) whom we have authorized to make those findings.

Costs of Compliance

We estimate that this proposed AD affects 137 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.

Authority for This Rulemaking

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

Regulatory Findings

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This AD applies to all The Boeing Company Model 747-400, 747-400D, and 747-400F airplanes, certificated in any category.

(d) Subject

Air Transport Association (ATA) of America Code 57, Wings.

(e) Unsafe Condition

This AD was prompted by a report of a 13.4-inch crack in the left wing front spar web inboard of pylon number 2 between front spar station inboard (FSSI) 655.75 and FSSI 660, found following a fuel leak. We are issuing this AD to detect and correct cracking in the front spar web, which could lead to fuel leaks and a consequent fire.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Repetitive Detailed, Ultrasonic, and High Frequency Eddy Current Inspections

At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-57A2357, dated September 12, 2016, except as provided by paragraph (i) of this AD, do detailed, ultrasonic, and high frequency eddy current inspections for any cracking in the front spar web, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-57A2357, dated September 12, 2016. Repeat the inspections thereafter at the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-57A2357, dated September 12, 2016.

(h) Repair of Any Cracking

If any crack is found during any inspection required by paragraph (g) of this AD, before further flight, repair using a method approved in accordance with the procedures specified in paragraph (j) of this AD. Thereafter, repeat the inspections specified by paragraph (g) of this AD at all unrepaired areas.

(i) Service Information Exceptions

Where paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-57A2357, dated September 12, 2016, specifies a compliance time “after the original date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.

(j) Alternative Methods of Compliance (AMOCs)

(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (k)(1) of this AD. Information may be emailed to: 9-ANM-Seattle-ACO-AMOC-Requests@faa.gov.

(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

(4) Except as required by paragraph (i) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (j)(4)(i) and (j)(4)(ii) of this AD apply.

(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or substep is labeled “RC Exempt,” then the RC requirement is removed from that step or substep. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

The Social Security Administration (SSA) separately published, in today's Federal Register, notice of a new system of records, entitled Anti-Harassment & Hostile Work Environment Case Tracking and Records System. Because this system will contain some investigatory material compiled for law enforcement purposes, the SSA proposes to exempt those records within this new system of records from specific provisions of the Privacy Act.

DATES:

To ensure that your comments are considered, we must receive them no later than January 3, 2017.

ADDRESSES:

You may submit comments by any one of three methods—Internet, fax, or mail. Do not submit the same comments multiple times or by more than one method. Regardless of which method you choose, please state that your comments refer to Docket No. SSA-2015-0014, so that we may associate your comments with the correct regulation.

Caution:

You should be careful to include in your comments only information that you wish to make publicly available. We strongly urge you not to include in your comments any personal information, such as Social Security numbers or medical information.

1. Internet: We strongly recommend that you submit your comments via the Internet. Please visit the Federal eRulemaking portal at http://www.regulations.gov. Use the Search function to find docket number SSA-2015-0014. The system will issue a tracking number to confirm your submission. You will not be able to view your comment immediately because we must post each comment manually. It may take up to a week for your comment to be viewable.

Comments are available for public viewing on the Federal eRulemaking portal at http://www.regulations.gov or in person, during regular business hours, by arranging with the contact person identified below.

In accordance with the Privacy Act (5 U.S.C. 552a) we are issuing public notice of our intent to establish a new system of records entitled, Anti-Harassment & Hostile Work Environment Case Tracking and Records System (Anti-Harassment System) (60-0380). The Equal Employment Opportunity Commission (EEOC) requires that agencies implement anti-harassment policies and procedures separate from the Equal Employment Opportunity process. As a result of implementing those policies and procedures, we propose establishing the Anti-Harassment system to manage information regarding allegations of workplace harassment filed by SSA employees and SSA contractors alleging harassment by another SSA employee, as well as allegations of workplace harassment filed by SSA employees alleging harassment by an SSA contractor.

We propose establishing the Anti-Harassment system as part of our compliance efforts under Title VII of the Civil Rights Act of 1964; the Age Discrimination in Employment Act of 1967; the Americans with Disabilities Act of 1990 (ADA); the ADA Amendments Act of 2008; the Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No FEAR Act); and the Genetic Information Nondiscrimination Act of 2008 (GINA); and Executive Orders 11478, 11246, 13152, and 13087. These legal authorities prohibit discrimination, including harassment, based on sex, race, color, religion, national origin, age, disability, genetic information, or other protected basis.

The Anti-Harassment System will capture and house information regarding allegations of workplace harassment filed by SSA employees and SSA contractors alleging harassment by another SSA employee, and any investigation, or response, we take because of the allegation. Due to the investigatory nature of information that will be maintained in this system of records, this proposed rule would add the Anti-Harassment System to the list of SSA systems that are exempt from specific provisions of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2).

Rulemaking Analyses and Notices

All comments received on or before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. A final rule may be published at any time after close of the comment period.

Clarity of This Rule

Executive Order 12866, as supplemented by Executive Order 13563, requires each agency to write all rules in plain language. In addition to your substantive comments on this proposed rule, we invite your comments on how to make the rule easier to understand.

For example:

• Would more, but shorter, sections be better?

• Are the requirements in the rule clearly stated?

• Have we organized the material to suit your needs?

• Could we improve clarity by adding tables, lists, or diagrams?

• What else could we do to make the rule easier to understand?

• Does the rule contain technical language or jargon that is not clear?

• Would a different format make the rule easier to understand, e.g. grouping and order of sections, use of headings, paragraphing?

Regulatory Procedures

SSA will publish a final rule responding to any comments received and, if appropriate, will amend provisions of the rule.

Executive Order 12866, as Supplemented by Executive Order 13563

We consulted with the Office of Management and Budget (OMB) and determined that this proposed rule does not meet the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Therefore, OMB did not review it.

We also determined that this proposed rule meets the plain language requirement of Executive Order 12866.

Executive Order 13132 (Federalism)

This proposed rule was analyzed in accordance with the principles and criteria established by Executive Order 13132, and SSA determined that the proposed rule will not have sufficient Federalism implications to warrant the preparation of a Federalism assessment. SSA also determined that this proposed rule will not preempt any State law or State regulation or affect the States' abilities to discharge traditional State governmental functions.

Executive Order 12372 (Intergovernmental Review)

The regulations effectuating Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this proposed rule.

Regulatory Flexibility Act

We certify that this proposed rule will not have a significant economic impact on a substantial number of small entities because it affects individuals only. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

Paperwork Reduction Act

This proposed rule does not create any new or affect any existing collections and, therefore, do not require Office of Management and Budget approval under the Paperwork Reduction Act.

List of Subjects in 20 CFR Part 401

Privacy and disclosure of official records and information.

Carolyn W. Colvin,Acting Commissioner of Social Security.

For the reasons stated in the preamble, we are proposing to amend subpart B of part 401 of title 20 of the Code of Federal Regulations as set forth below:

PART 401—PRIVACY AND DISCLOSURE OF OFFICIAL RECORDS AND INFORMATIONSubpart B—[Amended]1. The authority citation for subpart B of part 401 continues to read as follows:Authority:

The Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes to establish the 133-square mile “Dahlonega Plateau” viticultural area in portions of Lumpkin and White Counties, Georgia. The proposed viticultural area does not lie within or contain any established viticultural area. TTB designates viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase. TTB invites comments on this proposed addition to its regulations.

DATES:

Comments must be received by January 31, 2017.

ADDRESSES:

Please send your comments on this notice to one of the following addresses:

• Internet: http://www.regulations.gov (via the online comment form for this notice as posted within Docket No. TTB-2016-0012 at “Regulations.gov,” the Federal e-rulemaking portal);

See the Public Participation section of this notice for specific instructions and requirements for submitting comments, and for information on how to request a public hearing or view or obtain copies of the petition and supporting materials.

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The Secretary has delegated various authorities through Treasury Department Order 120-01, dated December 10, 2013, (superseding Treasury Order 120-01, dated January 24, 2003), to the TTB Administrator to perform the functions and duties in the administration and enforcement of these provisions.

Part 4 of the TTB regulations (27 CFR part 4) authorizes TTB to establish definitive viticultural areas and regulate the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets forth standards for the preparation and submission of petitions for the establishment or modification of American viticultural areas (AVAs) and lists the approved AVAs.

Definition

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features, as described in part 9 of the regulations, and a name and a delineated boundary, as established in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to the wine's geographic origin. The establishment of AVAs allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of an AVA is neither an approval nor an endorsement by TTB of the wine produced in that area.

Requirements

Section 4.25(e)(2) of the TTB regulations (27 CFR 4.25(e)(2)) outlines the procedure for proposing an AVA and provides that any interested party may petition TTB to establish a grape-growing region as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes the standards for petitions for the establishment or modification of AVAs. Petitions to establish an AVA must include the following:

• Evidence that the area within the proposed AVA boundary is nationally or locally known by the viticultural area name specified in the petition;

• An explanation of the basis for defining the boundary of the proposed AVA;

• A narrative description of the features of the proposed AVA affecting viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposed AVA distinctive and distinguish it from adjacent areas outside the proposed boundary;

• The appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed AVA, with the boundary of the proposed AVA clearly drawn thereon; and

• A detailed narrative description of the proposed AVA boundary based on USGS map markings.

Dahlonega Plateau Petition

TTB received a petition from Amy Booker, President of the Dahlonega-Lumpkin Chamber & Visitors Bureau, on behalf of local vineyard and winery owners, proposing to establish the “Dahlonega Plateau” AVA. The proposed AVA is located in portions of Lumpkin and White Counties, in Georgia. The proposed AVA encompasses approximately 133 square miles. Seven wineries and 8 commercial vineyards covering a total of approximately 110 acres are distributed throughout the proposed AVA. The petition notes that there are an additional 12 acres of vineyards planned for planting within the proposed AVA in the next few years.

According to the petition, the distinguishing features of the proposed Dahlonega Plateau AVA are its topography and climate. Unless otherwise noted, all information and data pertaining to the proposed AVA contained in this document are from the petition for the proposed Dahlonega Plateau AVA and its supporting exhibits.

Name Evidence

The proposed Dahlonega Plateau AVA derives its name from a long, narrow, northeast-southwest trending plateau in the northern foothills of the Georgia Piedmont known as the Dahlonega Plateau. The plateau covers most of Lumpkin, Dawson, White, Pickens, and Cherokee Counties. However, the proposed AVA is limited to the northeastern portion of the plateau, in Lumpkin and White Counties, due to a lack of viticulture in the southwestern region of the plateau, as well topographical and climatic differences.

The town of Dahlonega, which is located within the proposed AVA, derived its name from the Cherokee word “dalonige,” which means “yellow” or “golden,” due to the presence of gold in the region. The town was named in 1837, and the geological feature derives its name, in part, from the name of the town. The petition states that the first written reference to the plateau was in a 1911 scientific paper by geologist L.C. Glenn, who noted, “In the Chestatee basin about [the town of] Dahlonega the upland is an old, well-dissected plateau * * *.” 1 The petition lists several other professional papers and books, both historical and contemporary, which describe a geological feature known as the “Dahlonega Plateau.” These sources are listed in the “References” section of the petition. Additionally, an excerpt from a contemporary travel guide describes the region of the proposed AVA as follows: “In the northeastern section of the Piedmont lies the Dahlonega Plateau, a deeply eroded region of steep, forested hills and narrow valleys * * *.” 2 An online travel site states, “A broad, high plain shadowed by some of Georgia's highest mountains, the Dahlonega Plateau offers near perfect growing conditions [for wine grapes].” 3 Finally, the petition includes a 1976 map of the physiographic regions of Georgia, from the Georgia Department of Natural Resources, which includes a region titled “Dahlonega Uplands/Dahlonega Plateau.”

1 Glenn, L.C., 1911, Denudation and Erosion in the Southern Appalachian Region and in the Monongahela Basin: U.S. Geological Survey, Prof. Paper 72.

The northern and northeastern boundaries of the proposed Dahlonega Plateau AVA follow the 1,800-foot elevation contour and separate the proposed AVA from the higher, steeper slopes of the Blue Ridge Mountains. The proposed eastern and southeastern boundaries follow a series of straight lines drawn between roads and elevation points marked on the USGS maps which separate the proposed AVA from the physiographic features known as the Hightower Ridges and the Central Uplands. The proposed southwestern and western boundaries also follow a series of straight lines drawn between roads and elevation points on the USGS maps in order to separate the proposed AVA from the southwestern portion of the plateau, which has a different topography and climate.

Distinguishing Features

The distinguishing features of the proposed Dahlonega Plateau AVA are its topography and climate.

Topography

The topography of the proposed AVA is characterized by broad, rounded hilltops separated by wide valleys. According to the petition, the distinctive topography is due to the underlying geology of the proposed AVA, which is comprised of layers of rocks that weather uniformly and are moderately resistant to erosion. Over time, wind and water have gradually worn down the underlying rocks and formed a gently rolling landscape with moderate elevations that are lower than the elevations to the north and east and higher than the elevations to the south and west.

By contrast, the geology of Blue Ridge Mountains to the north and northeast of the proposed AVA is comprised of rocks that are structurally higher and more erosion-resistant than those of the proposed AVA. Because the rocks do not erode as easily, the Blue Ridge Mountains generally have higher elevations than are found within the proposed Dahlonega Plateau AVA. Additionally, the peaks within the Blue Ridge Mountains are more rugged and the slopes are steeper because the surfaces have not been as softened or rounded by erosion as the hilltops of the proposed AVA.

To the immediate east and southeast of the proposed AVA are the Hightower Ridges. The geology of these ridges is characterized by strongly-layered, alternating zones of weak rocks and more resistant rocks. These alternating zones have a strong northeast-southwest orientation. Because these layers erode at different rates, the resulting topography has a “washboard” appearance, with steep, parallel ridges (formed from the more resistant layers) separated by narrow valleys (formed from the less resistant layers). Compared to the proposed AVA, the valleys generally have lower minimum elevations and the ridges generally have higher maximum elevations. Farther south and running parallel to the Hightower Ridges is the Central Uplands region. The topography of this region is similar to that of the proposed AVA, with broad valleys and rolling hills, but with a wider range of elevations.

To the west and southwest of the proposed AVA, in the southwestern portion of the geological feature known as the Dahlonega Plateau, the underlying geology is comprised of rocks that are less erosion-resistant and structurally lower than the rocks in the northeastern portion of the plateau, which are within the proposed AVA. Because the rocks are more susceptible to erosion, the topography of the southwestern portion of the plateau is generally flatter and lower than within the proposed AVA.

The following table shows the minimum, maximum, and mean elevations for the proposed Dahlonega Plateau AVA and the surrounding areas, which were described in the petition.4

4 Figure 7 of the petition shows the location of the comparison regions in relation to the proposed AVA.

The topography of the proposed Dahlonega Plateau AVA and the surrounding regions has an effect on viticulture. Because the hills within the proposed AVA are gently sloped and have moderate elevations, the floors of the intervening valleys are not highly shadowed and receive adequate sunlight for vineyards. The hillsides within the proposed AVA are also suitable for vineyards because they are not so steep as to make mechanical cultivation difficult or dangerous. The petition also states that the proposed AVA's location between higher and lower elevations allows cool nighttime air draining from the higher elevations of the Blue Ridge Mountains to flow through the proposed AVA and into the lower elevations to the south and west. As a result, vineyards within the proposed AVA benefit from cool nighttime temperatures but do not have a high risk of frost because the cool air does not settle.

5 This information is also presented as a map in Figure 8 of the petition.

By contrast, the petition states that the topography of the regions surrounding the proposed AVA is less suitable for vineyards. Within the Blue Ridge Mountains and Hightower Ridges to the north, east, and southeast of the proposed AVA, the narrow valleys are often shadowed by the surrounding steep, high slopes, meaning less light would reach any vineyard planted on the valley floors. The steepness of the slopes would also make mechanical cultivation of any vineyard planted on the sides of the mountains impractical. In the lower elevations of the regions to the south and west of the proposed AVA, cool air draining from higher elevations eventually settles and pools and would increase the risk of frost damage in any vineyard planted there.

Climate

Topography, and more specifically elevation, also affects the climate of the proposed Dahlonega Plateau AVA and the surrounding regions. The petition included information on the length of the growing season, growing degree day accumulations, and precipitation amounts within the proposed AVA and the surrounding regions. According to the petition, the proposed AVA's location between higher elevations to the north, east, and southeast and lower elevations to the southwest and west create climatic conditions that are ideal for growing grape varietals such as Cabernet Franc, Cabernet Sauvignon, Chardonnay, and Merlot.

Length of Growing Season: The petition states that the length of the growing season within the proposed Dahlonega Plateau AVA provides ample time for most Vitis vinifera (V. vinifera) varietals of grapes to ripen. The petition included the average minimum, maximum, and mean length of the growing season within the proposed AVA and the surrounding areas. Because the growing season length within a given region may fluctuate based on the range of elevations within that region, the petition also listed the percentage of terrain within each region that is within a given range of growing season length. The growing season data is shown in the following tables.

The data in Table 2 shows that the mean growing season length is shorter in regions with high elevations and longer in regions with lower elevations. The proposed Dahlonega Plateau AVA, with its moderate elevations, has a mean growing season length that is longer than the regions to the north and northeast, which have higher elevations, and is shorter than the regions to the south and west, which have lower elevations.

6 Growing season length calculated using 1981-2010 climate normals. Locations of weather stations are shown in Figure 15 of the petition. “Growing season” is defined as the number of days between the last 28 degree F day of the spring and the first occurrence of that temperature in the fall. Plant tissue freezes at 28 degrees F. This information is also presented as a map in Figure 17 of the petition.

7 This information is also presented as a map in Figure 17 of the petition.

Table 3 shows that over 60 percent of the terrain within the proposed AVA has a growing season length of 190 to 200 days, which is a higher percentage of terrain with that length of a growing season than any of the surrounding regions except the Hightower Ridges region to the east. The petition states that guidelines for selecting vineyard sites based on growing season lengths, published by the College of Agriculture and Life Sciences at Cornell University in conjunction with the Institute for the Application of Geospatial Technology,8 do not recommend planting vineyards in regions with growing seasons shorter than 160 days because most grape varietals will not have time to ripen fully. Sites with growing seasons of between 180 and 190 days are described as “good,” while sites with growing seasons between 190 and 200 days are “not limited by growing season.” Sites with growing seasons of over 200 days are considered suitable for growing varietals that need a long time to mature. Based on this guidance, vineyard owners can plant many different grape varietals in the majority of the proposed AVA without the fear of having too short of a growing season for the grapes to ripen.

Growing Degree Days: The petition notes that although growing season length is important because it reflects the number of frost-free days, the temperatures that are reached during that frost-free period are just as important to viticulture. The petition states that grape vines do not grow and fruit does not mature when temperatures are below 50 degrees Fahrenheit (F). Therefore, a region that has a 180-day frost-free growing season would still be unsuitable for viticulture if temperatures seldom or never rise above 50 degrees F.

Growing degree day (GDD) accumulations are a way of describing the frequency that temperatures within a region exceed 50 degrees F during the growing season.9 The Winkler zone scale ranges from the very cool Zone I, for regions accumulating 2,500 or fewer GDDs in a growing season, to the very warm Zone V, for regions accumulating over 4,000 GDDs. The petition included the information in the following table which shows the percentage of the proposed AVA and the surrounding areas that can be categorized into each of the five Winkler zones.10

10 The growing degree day data for the proposed AVA and the surrounding regions was calculated using the PRISM Climate Group's 1981-2010 climate normals. The Parameter Elevation Regression on Independent Slopes Model (PRISM) climate data mapping system combined climate normals gathered from weather stations, along with other factors such as elevation, longitude, slope angles, and solar aspect to estimate the general climate patterns for the proposed AVA and the surrounding regions. Climate normals are only calculated every 10 years, using 30 years of data, and at the time the petition was submitted, the most recent climate normals available were from the period of 1981-2010. (PRISM Climate Group, Oregon State University, http://prism.oregonstate.edu, created 4 February 2004).

The data in the table shows that all of the terrain within the proposed Dahlonega Plateau AVA is classified in the intermediate ranges of the Winkler scale (Zones III and IV). The proposed AVA has a higher percentage of terrain within Zone IV than any of the surrounding regions and lacks any terrain in the very cool Zone I, the cool Zone II, or the very warm Zone V. According to the petition, regions classified as Zones III or IV, such as the proposed AVA, are suitable for growing a diverse range of late-ripening varietals of V. vinifera, including Cabernet Sauvignon and Merlot. Regions that are categorized as Zones I and II have temperatures that are too low to ripen the varietals grown within the proposed AVA and are more suitable for growing cold-hardy French-American hybrid varietals and early ripening V. vinifera varietals such as Riesling and Pinot Noir. Finally, the petition states that regions categorized as the very warm Zone V are best suited for growing long-season varietals of wine grapes that tolerate the high heat, such as Muscadine, and for growing table grapes.

11 This information is also presented as a map in Figure 19 of the petition.

Precipitation: According to the petition, the rising elevations of the proposed AVA and the regions to the north and east cause the moisture-laden winds travelling inland from the Gulf of Mexico and Atlantic Ocean to drop their rain. Areas with higher elevations typically receive more annual rainfall than regions with lower elevations. The petition included information on the mean annual, growing season, and winter precipitation amounts for the proposed Dahlonega Plateau AVA and the surrounding regions. The following table is derived from information included in the petition. All data was gathered from 1981-2010 climate normals.

12 This information is also presented as a map in Figure 20 of the petition.

The data in the table shows that annual rainfall amounts within the proposed AVA are in the intermediate range. The regions to the north and east generally receive more rainfall annually than the proposed AVA, and the regions to the south and west generally receive less. The petition states that vineyard irrigation within the proposed AVA is seldom necessary because the average annual amount of rainfall within the proposed AVA is sufficient for the adequate hydration of grapevines.

Finally, the petition states that the amount of rainfall a region receives during the winter months has an effect on viticulture. Excessive precipitation during the winter months can delay bud break and/or pruning in vineyards, which can lead to a late harvest and a higher probability of fruit remaining on the vine when damaging fall frosts occur. Delayed bud break is less likely within the proposed AVA than in the higher elevations to the north and east because the proposed AVA has lower winter rainfall amounts. However, the possibility of delayed bud break within the proposed AVA is higher than within the lower elevations of the regions to the south and west, because those regions typically receive less winter precipitation.

Summary of Distinguishing Features

In summary, the evidence provided in the petition indicates that the viticulturally significant geographic features of the proposed Dahlonega Plateau AVA distinguish it from the surrounding regions in each direction. With respect to topography, the proposed AVA is characterized by broad, rounded hilltops, wide valleys, gentle slopes, and moderate elevations. By contrast, the regions to the north and northeast of the proposed AVA, within the Blue Ridge Mountains, feature high elevations and steep, rugged slopes. To the east and southeast of the proposed AVA, within the Hightower Ridges, the topography has a “washboard” appearance, with high, steep ridges separated by narrow valleys. To the west and southwest of the proposed AVA, the topography is generally flatter and elevations are lower.

Temperatures within the proposed Dahlonega Plateau are suitable for growing most V. vinifera varietals of grapes. The mean growing season length within the proposed AVA is longer than within the regions to the north and northeast and shorter than within the regions to the south and west. With respect to GDDs, the proposed AVA is classified in the intermediate Winkler Zones III and IV, with the majority of the proposed AVA classified as Zone IV. The regions to the north and northeast of the proposed AVA are primarily classified as Zone III and also contain areas classified as Zones I and II. The regions to the southeast and west have areas that are classified as the very warm Zone V.

Finally, precipitation amounts within the proposed AVA provide sufficient hydration for grapevines, making irrigation seldom necessary. The regions to the north and east of the proposed AVA generally receive more rainfall, and regions to the south and west generally receive less.

TTB Determination

TTB concludes that the petition to establish the Dahlonega Plateau viticultural area merits consideration and public comment, as invited in this notice of proposed rulemaking.

Boundary Description

See the narrative description of the boundary of the petitioned-for viticultural area in the proposed regulatory text published at the end of this proposed rule.

Maps

The petitioner provided the required maps, and they are listed below in the proposed regulatory text.

Impact on Current Wine Labels

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. For a wine to be labeled with an AVA name, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name, and the wine must meet the other conditions listed in § 4.25(e)(3) of the TTB regulations (27 CFR 4.25(e)(3)). If the wine is not eligible for labeling with an AVA name and that name appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the AVA name appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing an AVA name that was used as a brand name on a label approved before July 7, 1986. See § 4.39(i)(2) of the TTB regulations (27 CFR 4.39(i)(2)) for details.

If TTB establishes this proposed viticultural area, its name, “Dahlonega Plateau,” will be recognized as a name of viticultural significance under § 4.39(i)(3) of the TTB regulations (27 CFR 4.39(i)(3)). The text of the proposed regulation clarifies this point. Consequently, wine bottlers using the name “Dahlonega Plateau” in a brand name, including a trademark, or in another label reference as to the origin of the wine, would have to ensure that the product is eligible to use the viticultural name as an appellation of origin if this proposed rule is adopted as a final rule. TTB is not proposing to designate the term “Dahlonega,” standing alone, as a term of viticultural significance if the AVA is established, in order to avoid potentially affecting a current label holder.

Public ParticipationComments Invited

TTB invites comments from interested members of the public on whether it should establish the proposed viticultural area. TTB is also interested in receiving comments on the sufficiency and accuracy of the name, boundary, soils, climate, and other required information submitted in support of the petition. Please provide any available specific information in support of your comments.

Because of the potential impact of the establishment of the proposed Dahlonega Plateau AVA on wine labels that include the term “Dahlonega Plateau” as discussed above under Impact on Current Wine Labels, TTB is particularly interested in comments regarding whether there will be a conflict between the proposed area name and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any anticipated negative economic impact that approval of the proposed viticultural area will have on an existing viticultural enterprise. TTB is also interested in receiving suggestions for ways to avoid conflicts, for example, by adopting a modified or different name for the viticultural area.

Submitting Comments

You may submit comments on this notice by using one of the following three methods:

• Federal e-Rulemaking Portal: You may send comments via the online comment form posted with this notice within Docket No. TTB-2016-0012 on “Regulations.gov,” the Federal e-rulemaking portal, at http://www.regulations.gov. A direct link to that docket is available under Notice No. 166 on the TTB Web site at https://www.ttb.gov/wine/wine-rulemaking.shtml. Supplemental files may be attached to comments submitted via Regulations.gov. For complete instructions on how to use Regulations.gov, visit the site and click on the “Help” tab.

• Hand Delivery/Courier: You may hand-carry your comments or have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Suite 400, Washington, DC 20005.

Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 166 and include your name and mailing address. Your comments also must be made in English, be legible, and be written in language acceptable for public disclosure. TTB does not acknowledge receipt of comments, and TTB considers all comments as originals.

In your comment, please clearly indicate if you are commenting on your own behalf or on behalf of an association, business, or other entity. If you are commenting on behalf of an entity, your comment must include the entity's name, as well as your name and position title. If you comment via Regulations.gov, please enter the entity's name in the “Organization” blank of the online comment form. If you comment via postal mail or hand delivery/courier, please submit your entity's comment on letterhead.

You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing.

Confidentiality

All submitted comments and attachments are part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider to be confidential or inappropriate for public disclosure.

Public Disclosure

TTB will post, and you may view, copies of this notice, selected supporting materials, and any online or mailed comments received about this proposal within Docket No. TTB-2016-0012 on the Federal e-rulemaking portal, Regulations.gov, at http://www.regulations.gov. A direct link to that docket is available on the TTB Web site at https://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 166. You may also reach the relevant docket through the Regulations.gov search page at http://www.regulations.gov. For information on how to use Regulations.gov, click on the site's “Help” tab.

All posted comments will display the commenter's name, organization (if any), city, and State, and, in the case of mailed comments, all address information, including email addresses. TTB may omit voluminous attachments or material that the Bureau considers unsuitable for posting.

You may also view copies of this notice, all related petitions, maps and other supporting materials, and any electronic or mailed comments that TTB receives about this proposal by appointment at the TTB Information Resource Center, 1310 G Street NW., Washington, DC 20005. You may also obtain copies at 20 cents per 8.5- x 11-inch page. Please note that TTB is unable to provide copies of USGS maps or other similarly-sized documents that may be included as part of the AVA petition. Contact TTB's information specialist at the above address or by telephone at 202-453-2265 to schedule an appointment or to request copies of comments or other materials.

Regulatory Flexibility Act

TTB certifies that this proposed regulation, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

Executive Order 12866

It has been determined that this proposed rule is not a significant regulatory action as defined by Executive Order 12866 of September 30, 1993. Therefore, no regulatory assessment is required.

Drafting Information

Karen A. Thornton of the Regulations and Rulings Division drafted this proposed rule.

List of Subjects in 27 CFR Part 9

Wine.

Proposed Regulatory Amendment

For the reasons discussed in the preamble, TTB proposes to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows:

PART 9—AMERICAN VITICULTURAL AREAS1. The authority citation for part 9 continues to read as follows:Authority:

(a) Name. The name of the viticultural area described in this section is “Dahlonega Plateau”. For purposes of part 4 of this chapter, “Dahlonega Plateau” is a term of viticultural significance.

(b) Approved maps. The 9 United States Geological Survey (USGS) 1:24,000 scale topographic maps used to determine the boundary of the Dahlonega Plateau viticultural area are titled:

(1) Dawsonville, GA, 1997;

(2) Campbell Mountain, GA, 2014;

(3) Nimblewill, GA, 1997;

(4) Noontootla, GA, 1988;

(5) Suches, GA, 1988;

(6) Neels Gap, GA, 1988;

(7) Dahlonega, GA, 1951;

(8) Cowrock, GA, 1988; and

(9) Cleveland, GA, 1951; photorevised 1973; photoinspected 1981.

(c) Boundary. The Dahlonega Plateau viticultural area is located in Lumpkin and White Counties, Georgia. The boundary of the Dahlonega Plateau viticultural area is as described below:

(1) The beginning point is found on the Dawsonville map at the marked 1,412-foot elevation point at the intersection of an unnamed light-duty road known locally as Castleberry Bridge Road and an unimproved road known locally as McDuffie River Road.

(2) From the beginning point, proceed north-northeast in a straight line approximately 0.89 mile to the marked 1,453-foot elevation point; then

(3) Proceed northwest in a straight line approximately 1.94 miles, crossing onto the Campbell Mountain map, to the intersection of Arrendale Road and Windy Oaks Road; then

(4) Proceed northwest in a straight line approximately 0.77 mile to the intersection of the 1,400-foot elevation contour and Dennson Branch; then

(5) Proceed northwest in a straight line approximately 0.79 mile to the intersection of the 1,360-foot elevation contour and Mill Creek; then

(6) Proceed northwest in a straight line approximately 0.48 mile to the intersection of the 1,500-foot elevation contour and Sheep Wallow Road; then

(7) Proceed northwest in a straight line approximately 1.74 miles to the intersection of State Route 52 and the Chattahoochee National Forest boundary; then

(8) Proceed northwest in a straight line approximately 1.89 miles, crossing onto the Nimblewill map and then crossing over the marked 1,749-foot elevation point along an unnamed light-duty road known locally as Nimblewill Church Road, to the line's intersection with the 1,800-foot elevation contour; then

(9) Proceed generally east-northeast along the 1,800-foot elevation contour approximately 170.72 miles (straight-line distance between points is approximately 20.43 miles), crossing over the Noontootla, Suches, Neels Gap, and Dahlonega maps and onto the Cowrock map, to the intersection of the 1,800-foot elevation contour with Tom White Branch; then

(10) Proceed southeast along Tom White Branch approximately 0.73 mile to the 1,600-foot elevation contour; then

(11) Proceed southeast in a straight line approximately 1.10 miles to the intersection of Cathey Creek and the secondary highway marked Alt. 75; then

(12) Proceed southwest in a straight line approximately 3.77 miles, crossing onto the Cleveland map, to the intersection of two unnamed light-duty roads known locally as Dockery Road and Town Creek Road; then

(13) Proceed south in a straight line approximately 0.58 mile to the marked 1,774-foot elevation point; then

(14) Proceed southwest in a straight line approximately 0.60 mile to the 1,623-foot benchmark (BM); then

(15) Proceed southwest in a straight line approximately 2.73 miles, crossing onto the Dahlonega map, to the 1,562-foot benchmark; then

(16) Proceed southwest in a straight line approximately 3.46 miles to the marked 1,480-foot elevation point near the Mt. Sinai Church; then

(17) Proceed southwest in a straight line approximately 2.13 miles to the summit of Crown Mountain; then

(18) Proceed west in a straight line approximately 1.28 miles, crossing onto the Campbell Mountain map, to the intersection of the 1,160-foot elevation contour and Cane Creek; then

(19) Proceed southwest in a straight line approximately 1.61 miles to the intersection of the 1,300-foot elevation contour and Camp Creek; then

(20) Proceed southwest in a straight line approximately 2.02 miles, crossing onto the Dawsonville map, to the intersection of the 1,200-foot elevation contour with the Etowah River; then

(21) Proceed southwest in a straight line approximately 1.29 miles to the beginning point.

On October 4, 2016, OSHA published a Notice of Proposed Rulemaking (NPRM) titled “Standards Improvement Project-Phase IV.” The period for submitting comments is being extended 30 days to allow parties affected by the rule more time to review the proposed rule and collect information and data necessary for comments.

DATES:

Comments must be submitted by January 4, 2017. All submissions must bear a postmark or provide other evidence of the submission date.

ADDRESSES:

Submit comments and additional material using any of the following methods:

Facsimile. Commenters may fax submissions, including any attachments that are no longer than 10 pages in length to the OSHA Docket Office at (202) 693-1648; OSHA does not require hard copies of these documents. Commenters must submit lengthy attachments that supplement these documents (e.g., studies, journal articles) to the OSHA Docket Office, Technical Data Center, Room N3653, U.S. Department of Labor, 200 Constitution Ave. NW., Washington, DC 20210. These attachments must clearly identify the commenter's name, date, subject, and docket number (OSHA-2012-0007) so the Agency can attach them to the appropriate comments.

Instructions. All submissions received must include the Agency name and the docket number for this rulemaking (OSHA-2012-0007). OSHA places all submissions, including any personal information provided, in the public docket without change; this information will be available online at http://www.regulations.gov. Therefore, the Agency cautions commenters about submitting information they do not want made available to the public, or submitting comments that contain personal information (either about themselves or others) such as Social Security numbers, birth dates, and medical data.

OSHA requests comments on all issues related to this proposed rule, including whether these revisions will have any economic, paperwork, or other regulatory impacts on the regulated community.

Docket. To read or download submissions or other material in the docket (including material referenced in the preamble), go to http://www.regulations.gov, or contact the OSHA Docket Office at the address listed above. While the Agency lists all documents in the docket in the http://www.regulations.gov index, some information (e.g., copyrighted material) is not publicly available to read or download through this Web site. All submissions, including copyrighted material, are accessible at the OSHA Docket Office. Contact the OSHA Docket Office for assistance in locating docket submissions.

Copies of this Federal Register notice. Electronic copies are available at http://www.regulations.gov. This Federal Register notice, as well as news releases and other relevant information, also are available at OSHA's Web page at http://www.osha.gov.

SUPPLEMENTARY INFORMATION:

I. Extension of the Comment Period

On October 4, 2016, at 81 FR 68504, OSHA published a Notice of Proposed Rulemaking (NPRM) titled “Standards Improvement Project-Phase IV.” In this NPRM, OSHA continues its efforts to remove or revise outdated, duplicative, unnecessary, and inconsistent requirements in its safety and health standards by proposing 18 revisions to existing standards in its recordkeeping, general industry, maritime, and construction standards, with most of the revisions to its construction standards. The NPRM provides an explanation of the rule and its economic analysis, and solicits comments from the public regarding the contents of the proposal. The period for submitting comments was to expire on December 5, 2016. However, two stakeholders have requested an extension of 45 days for submitting written comments and information. Both stakeholders noted that the NPRM addresses 18 separate standards that each require separate analysis of the proposed changes.

OSHA believes that a 30 day extension is sufficient to facilitate the submission of thorough reviews and provide OSHA with a complete record for this proposed rule so that OSHA has all the information needed to develop a final rule. Accordingly, OSHA extends the comment period by 30 days, and written comments must be submitted by January 4, 2017.

II. Submission of Comments and Access to the Docket

OSHA invites comments on the proposed revisions described, and the specific issues raised, in the NPRM. These comments should include supporting information and data. OSHA will carefully review and evaluate these comments, information, and data, as well as any other information in the rulemaking record, to determine how to proceed. When submitting comments, parties must follow the procedures specified in the previous sections titled DATES and ADDRESSES. The comments must provide the name of the commenter and docket number (OSHA-2012-0007). The comments also should identify clearly the provision of the proposal each comment is addressing, the position taken with respect to the proposed provision or issue, and the basis for that position. Comments, along with supporting data and references, submitted on or before the end of the specified comment period will become part of the proceedings record, and will be available for public inspection and copying at http://www.regulations.gov.

Authority and Signature

David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, U.S. Department of Labor, authorized the preparation of this notice pursuant to Sections 4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657), 29 CFR part 1911, and Secretary's Order 1-2012 (77 FR 3912).

The Environmental Protection Agency (EPA) is proposing limited revisions to the source-specific Federal Implementation Plan (FIP) that was promulgated to regulate air pollutant emissions from the Four Corners Power Plant (FCPP), a coal-fired power plant located on the reservation lands of the Navajo Nation, near Farmington, New Mexico. These limited revisions propose to make certain provisions of the FIP consistent with national actions and rulemakings promulgated since 2012; update the FIP to reflect recent operating changes; and add new provisions to the FIP to include the air pollution control requirements for FCPP of a Consent Decree entered in the United States District Court for the District of New Mexico on August 17, 2015.

DATES:

Any comments on this proposal must arrive by January 3, 2017.

ADDRESSES:

Submit your comments, identified by Docket ID number EPA-R09-OAR-2016-0339, at http://www.regulations.gov, or via email to lee.anita@epa.gov. For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, the EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the Web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the EPA's full public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

In today's action, the EPA is proposing limited revisions to the FIP for FCPP that we promulgated on May 7, 2007 (“2007 FIP”) and August 24, 2012 (“2012 FIP”).1 The 2007 and 2012 regulations are codified in the Code of Federal Regulations (CFR) at 40 CFR 49.5512, and we refer collectively to the provisions from the 2007 and 2012 actions as the “FIP” or the “FCPP FIP.” The EPA established federally enforceable emission limitations for particulate matter (PM), sulfur dioxide (SO2), oxides of nitrogen (NOX), and opacity in the FCPP FIP.

1See 72 FR 25698 (May 7, 2007) and 77 FR 51620 (August 24, 2012).

The EPA is proposing revisions to the FIP for several reasons: (1) To make certain provisions in the FIP consistent with national actions and rulemakings promulgated since 2012; (2) to update the FIP to reflect recent operating changes; and (3) to add new provisions to the FIP to include the air pollution control requirements for FCPP of a Consent Decree (“Consent Decree”) entered in the United States District Court for the District of New Mexico on August 17, 2015.2

2See Consent Decree for Dine CARE v. Arizona Public Service Company and EPA v. Arizona Public Service Company, US District Court for the District of New Mexico, Case No. 1:11-cv-00889-JB-SCY (August 17, 2015).

To update the FCPP FIP for consistency with national actions and rulemakings, we are proposing to remove: (1) Emission limit exemptions that apply during periods of startup and shutdown; (2) a provision allowing for an affirmative defense during periods of malfunctions; and (3) exemptions for water vapor from the opacity standard and monitoring and reporting requirements.3 These revisions, if finalized, would make the FCPP FIP consistent with the EPA's interpretations of Clean Air Act (CAA, or “the Act”) requirements, as reflected in the Agency's recent action concerning how provisions in state implementation plans (SIPs) treat excess emissions during startup, shutdown, and malfunctions (“2015 SSM Action”).4

The EPA is also proposing to update the testing requirements for PM in the FCPP FIP to be consistent with PM testing requirements promulgated nationally in the Mercury and Air Toxics Standards (MATS) Rule.5 The revisions to the PM testing requirements, if finalized, would increase the frequency of PM testing in the FIP to match the MATS Rule, allow the operator the option to demonstrate compliance using alternative methods, e.g., PM continuous emission monitoring systems (PM CEMS), and streamline the existing PM testing requirements.

In order to update the FIP to reflect the current operation of FCPP, we are proposing to add a statement to the applicability section of the FIP to clarify that Units 1, 2 and 3 have been permanently retired, and to remove certain provisions related to Units 1, 2, and 3 from the FIP that are no longer applicable following the permanent retirement of those units. The operator of FCPP removed those units from service by January 1, 2014 to comply with the requirements in the 2012 FIP that the EPA promulgated to address the Best Available Retrofit Technology (BART) provisions of the Regional Haze Rule for NOX.6 These revisions, if finalized, would enhance regulatory clarity by removing requirements that apply to emission units that have permanently ceased operation.

6See 77 FR 51620 (August 24, 2012) and 40 CFR 49.5512(i)(3).

The final changes in this proposed rulemaking are to add new provisions to the FCPP FIP to reflect requirements in the Consent Decree. Generally, the Consent Decree requires greater emission reductions of SO2, NOX, and PM by establishing lower emission limitations than the existing limitations in the FIP for these pollutants. The Consent Decree requires the operator of the facility to request that the EPA amend the FCPP FIP to incorporate the requirements and limitations from the Consent Decree. These proposed revisions, if finalized, would make the emission limitations and other requirements from the Consent Decree federally enforceable.

B. Facility

FCPP is a coal-fired power plant located on the Navajo Nation Indian Reservation, just west of Farmington, New Mexico, and it is co-owned by several entities and operated by Arizona Public Service (APS).7 The facility includes two units, Units 4 and 5, each with a capacity of 770 megawatts (MW) net generation, providing a total capacity of 1540 MW.8 Operations at the facility produce emissions of air pollutants, including SO2, NOX, and PM. Existing pollution control equipment on Units 4 and 5 include baghouses for PM control, lime spray towers (“scrubbers”) for SO2 control, and low-NOX burners for limiting NOX formation during the combustion process. FCPP is in the process of installing selective catalytic reduction (SCR) on Units 4 and 5 for additional NOX emission reductions to comply with the “better than BART” provisions of the 2012 FIP (under 40 CFR 49.5512(i)(3)) and with the Consent Decree.

7 FCPP is currently co-owned by Arizona Public Service, Public Service Company of New Mexico, Salt River Project, Tucson Electric Power, and El Paso Electric Company.

8 APS retired Units 1-3 (total capacity of 560 MW) at FCPP in January 2014 as part of a “better than BART” alternative it suggested to the EPA. For more information on the EPA's “better than BART” determination, please see 77 FR 51620 (August 24, 2012).

C. Attainment Status

FCPP is located in the Four Corners Interstate air quality control region, which is designated attainment for all criteria pollutants under the CAA.9

9See 40 CFR 81.332.

D. The EPA's Authority To Promulgate a FIP in Indian Country

When the CAA was amended in 1990, Congress included a new provision, section 301(d), granting the EPA authority to treat tribes in the same manner as states where appropriate.10 In 1998, the EPA promulgated regulations known as the Tribal Authority Rule (TAR).11 The EPA's promulgation of the TAR clarified, among other things, that state air quality regulations generally do not, under the CAA, apply to facilities located anywhere within the exterior boundaries of Indian reservations.12 Prior to the addition of section 301(d) and promulgation of the TAR, some states had mistakenly included emission limitations in their SIPs that they may have believed could apply under the CAA to private facilities operating on adjacent Indian reservations.

12See 63 FR 7254 at 7258 (noting that unless a state has explicitly demonstrated its authority and has been expressly approved by the EPA to implement CAA programs in Indian country, the EPA is the appropriate entity to implement CAA programs prior to tribal primacy), Arizona Public Service Company v. EPA., 211 F.3d 1280 (D.C. Cir. 2000), cert. denied sub nom, Michigan v. EPA., 532 U.S. 970 (2001) (upholding the TAR); see also Alaska v. Native Village of Venetie Tribal Government, 533 U.S. 520, 526 n.1 (1998) (primary jurisdiction over Indian country generally lies with federal government and tribes, not with states).

In the preambles to the proposed and final 1998 TAR, the EPA generally discusses the legal basis in the CAA that authorizes the EPA to regulate sources of air pollution in Indian country.13 The EPA concluded that the CAA authorizes the EPA to protect air quality throughout Indian country.14 In fact, in promulgating the TAR, the EPA specifically provided that, pursuant to the discretionary authority explicitly granted to the EPA under sections 301(a) and 301(d)(4) of the Act, the EPA “[s]hall promulgate without unreasonable delay such federal implementation plan provisions as are necessary or appropriate to protect air quality, consistent with the provisions of sections 304(a) [sic] and 301(d)(4), if a tribe does not submit a tribal implementation plan meeting the completeness criteria of 40 CFR part 51, Appendix V, or does not receive EPA approval of a submitted tribal implementation plan.” 15

15See 63 FR at 7273 (codified at 40 CFR 49.11(a)). In the preamble to the final TAR, the EPA explained that it was inappropriate to treat Tribes in the same manner as states with respect to section 110(c) of the Act, which directs the EPA to promulgate a FIP within 2 years after the EPA finds a state has failed to submit a complete state plan or within 2 years after the EPA disapproval of a state plan. Although the EPA is not required to promulgate a FIP within the 2-year period for tribes, the EPA promulgated 40 CFR 49.11(a) to clarify that the EPA will continue to be subject to the basic requirement to issue any necessary or appropriate FIP provisions for affected tribal areas within some reasonable time. See 63 FR at 7264-65.

E. Historical Overview of FCPP FIP Actions

On September 8, 1999, the EPA proposed a source-specific FIP for FCPP.16 The 1999 proposed FIP stated: “Although the facility has been historically regulated by New Mexico since its construction, the state lacks jurisdiction over the facility or its owners or operations for CAA compliance or enforcement purposes.” The EPA intended for the 1999 FIP to “federalize” the emission limitations that New Mexico had erroneously included in its SIP.17 The EPA received comments on the proposed 1999 FIP. However, at that time, concurrent negotiations between an environmental non-governmental organization, APS, and the Navajo Nation resulted in an agreement by APS to voluntarily increase the SO2 removal efficiency from the scrubbers at FCPP. The EPA did not take final action on the 1999 proposal.

16See 64 FR 48731 (September 8, 1999).

17Id. at 48733.

In 2006, the EPA proposed a new source-specific FIP for FCPP and took action to finalize it in 2007.18 This new FIP imposed federally enforceable emission limitations for SO2, based on the increased scrubber SO2 removal efficiency (72 to 88 percent), and for PM, based on the PM emission limitation from the New Mexico SIP. The 2006 proposed FIP also established an emission limitation for opacity and a requirement for control measures to limit dust emissions from coal handling and storage facilities, flyash handling and storage facilities, and from road-sweeping activities. In addition, the 2006 proposed FIP contained NOX emission limitations that already applied to FCPP as part of the Acid Rain Program created in the 1990 CAA Amendments.

18See 72 FR 25698 (May 7, 2007), codified at 40 CFR 49.5512(a)-(h).

On August 24, 2012, the EPA promulgated a final rule that established limits for NOX emissions from FCPP under the BART provision of the Regional Haze Rule, as well as control measures to limit emissions of dust.19 The final rule required the owners of FCPP to choose between two strategies for BART compliance: (1) Compliance with a plant-wide BART emission limitation of 0.11 pounds of NOX per million British thermal units of heat input (lb/MMBtu) by October 23, 2017, or (2) retirement of Units 1, 2, and 3 by January 1, 2014 and compliance with a BART emission limitation for NOX of 0.098 lb/MMBtu on Units 4 and 5 by July 31, 2018. The second BART compliance strategy, involving retirement of Units 1, 2, and 3, was based on a plan originally put forth by APS. This compliance strategy was proposed and finalized as an alternative emission control strategy that achieved greater reasonable progress than BART (“better than BART”).20 APS permanently ceased operation of Units 1, 2, and 3 at FCPP by January 1, 2014, and is currently engaged in the process of installing SCR on Units 4 and 5 to meet the applicable NOX emission limitations.

The provisions of the 2007 FIP are codified at 40 CFR 49.5512(a)-(h).21 The BART provisions of the 2012 FIP are codified at 40 CFR 49.5512(i), and the dust control measures from the 2012 FIP are codified at 40 CFR 49.5512(j).

21 The 2007 FIP was originally codified at 40 CFR 49.23. On April 29, 2011, the FCPP FIP was redesignated to 40 CFR 49.5512 at 76 FR 23879 (April 29, 2011).

II. Basis for Proposed Action

In this proposed FIP revision, the EPA is exercising its discretionary authority under sections 301(a) and 301(d)(4) of the CAA and 40 CFR 49.11(a). The EPA is proposing to find that it is “necessary or appropriate” to revise the FCPP FIP, because it contains certain provisions that are inconsistent with more recent actions and rulemakings promulgated by the EPA in the MATS Rule and the statutory requirements of the CAA, as reflected in the 2015 SSM Action. Thus, these provisions of the current FCPP FIP are inconsistent with current requirements and need to be revised to make them consistent with regulatory and statutory requirements. The EPA is also concerned that that these inconsistencies create confusion and could lead to regulatory uncertainty by the source, regulators, courts, or affected members of the public. Additionally, the Consent Decree requires APS to submit a request to the EPA to amend its FIP to include requirements of the Consent Decree. APS submitted its request on June 9, 2016.22 The EPA is also proposing to find that it is “necessary or appropriate” to revise the FIP at this time to include the Consent Decree provisions. For the reasons set forth above, we are proposing to find that limited revisions to the FIP for FCPP are “necessary or appropriate” to further protect air quality on the Navajo Nation.

The EPA is proposing limited revisions to the FCPP FIP at 40 CFR 49.5512 described as follows. We have included a document in the docket for this rulemaking that shows the original text of 40 CFR 49.5512 and the EPA's proposed revisions to that text.23

In the applicability section of the FIP, the EPA is proposing to add a statement that Units 1, 2, and 3 at FCPP permanently ceased operation by January 1, 2014 pursuant to the requirements of 40 CFR 49.5512(i)(3).

2. Revisions to 40 CFR 49.5512(c)

The EPA is proposing to: (1) Specify that the definitions in paragraph (c) of 40 CFR 49.5512(c) apply to paragraphs (a) through (j) of 40 CFR 49.5512; (2) delete the definition of affirmative defense at 40 CFR 49.5512(c)(1); and (3) delete the portion of the definition of malfunction that provides for an affirmative defense for malfunctions at 40 CFR 49.5512(c)(7). We are also proposing to delete portions of the definitions for shutdown (at 40 CFR 49.5512(c)(12)) and startup (at 40 CFR 49.5512(c)(13)) that relate to Units 1, 2, and 3.

3. Revisions to 40 CFR 49.5512(d)

The EPA is proposing to add a statement that the emission limitations under 40 CFR 49.5512(d) apply to FCPP at all times. Under 40 CFR 49.5512(d)(2), we are proposing to delete the portion of the PM emission limitation that provides detailed specifications, i.e., test duration and minimum collection volume, related to PM testing. The EPA is also proposing to delete the dust provisions in 40 CFR 49.5512(d)(3). Under 40 CFR 49.5512(d)(4), we are proposing to delete the exclusion of uncombined water droplets from the opacity standard and to add a provision stating that any unit for which the owner or operator installs, calibrates, maintains, and operates a PM CEMS to demonstrate compliance with emission limitations for PM will be exempt from the opacity standard. Finally, the EPA is proposing to delete the portion of the emission limitation for NOX under 40 CFR 49.5512(d)(5)(i) that applied to Units 1, 2, and 3.

4. Revisions to 40 CFR 49.5512(e)

Paragraph (e) of 40 CFR 49.5512 addresses testing and monitoring and generally uses sub-paragraphs (e)(1)-(e)(8) to outline pollutant-specific requirements to ensure compliance with the emission limitations in paragraph (d). Under 40 CFR 49.5512(e), the EPA is proposing to delete specific provisions for PM testing and move revised provisions for PM testing to 40 CFR 49.5512(e)(3). Also under 40 CFR 49.5512(e), we are proposing to remove provisions that exempt units from opacity monitoring requirements during periods when the stack is saturated and also to remove a presumption that high opacity readings that occur when the baghouse is operating within normal parameters are caused by water vapor and shall not be considered a violation. In addition, we are proposing to move the opacity monitoring requirements from 40 CFR 49.5512(e) to 40 CFR 49.5512(e)(6). In paragraph 49.5512(e)(1), we are proposing to delete provisions that specify the compliance deadline for installing CEMS for SO2 and NOX because CEMS for those pollutants have already been installed at FCPP. In paragraph (e)(3), we are proposing to revise the testing requirements for PM to be consistent with the three options for PM testing under the MATS Rule in 40 CFR part 63 subpart UUUUU. In paragraph (e)(6), we are proposing to clarify that (e)(6) applies if the opacity standard in paragraph (d)(4) is applicable, i.e., if the owner or operator has not elected to install and certify PM CEMS for demonstrating compliance with PM emission limitations. In addition, we are revising the opacity monitoring requirements in (e)(6) to provide three options for determining compliance with the opacity standard, if the opacity standard applies. Because Units 1, 2, and 3 at FCPP have permanently ceased operation, the EPA is also proposing to delete the testing requirements for those units in paragraph (e)(8).

5. Revisions to 40 CFR 49.5512(f)

The EPA is proposing revisions to the reporting and recordkeeping requirements to provide additional clarity that all reports and notifications required in paragraph (f), (f)(4), and (f)(4)(ii) should be reported to the Navajo Nation Environmental Protection Agency (NNEPA) and the EPA. We are also revising paragraph (f) to require that the Air Division and the Enforcement Division within the Region IX office of the EPA be provided reports and notifications. Paragraph (f)(1) includes CEMS notification and recordkeeping requirements, and we are proposing to add notification and recordkeeping requirements for the Continuous Opacity Monitoring Systems (COMS) and visible emission testing. In addition, we are also proposing to delete the water vapor exemptions in paragraphs (f)(4)(i) and (f)(4)(i)(H). Finally, paragraph (f)(4)(i)(G) requires written reports to include opacity exceedances from the COMS, and we are proposing to also require reporting of opacity exceedances from the visible emission performance tests.

6. Revisions to 40 CFR 49.5512(h)

The EPA is proposing to delete the startup and shutdown exemptions for opacity and PM at paragraph (h)(2), and to delete the provisions related to an affirmative defense for malfunctions in paragraph (h)(3).

7. Revisions to 40 CFR 49.5512(i)

The EPA is proposing to delete the technical specifications in paragraph (i)(1) for annual PM testing and require that PM testing be performed in accordance with paragraph (e)(3) of 49.5512, which requires either testing using procedures in accordance with the MATS Rule at 40 CFR part 63 subpart UUUUU, or the installation, calibration, maintenance, and operation of a continuous parametric monitoring system (CPMS) or a CEMS for PM. In addition, under paragraph (i)(2)(iii), we are proposing to correct a typographical error.

8. Addition of 40 CFR 49.5512(k)

The EPA is proposing to promulgate paragraph (k) to add emission limitations and other provisions from the Consent Decree to the FCPP FIP.

The EPA is proposing to add a statement to the applicability paragraph of the FIP that Units 1, 2, and 3 at the Four Corners Power Plant permanently ceased operation by January 1, 2014 pursuant to the requirements of 40 CFR 49.5512(i)(3). This proposed revision is intended to update the FIP to reflect current operation at FCPP.

The EPA's 2012 FIP for Regional Haze required FCPP to comply with either emission limitations for BART, achievable with the installation of SCR on all five units at FCPP, or a “better than BART” alternative.24 The operator of FCPP elected to comply with the alternative. Under the alternative, the operator retired Units 1, 2, and 3 by January 1, 2014, and has begun the process to install SCR on the Units 4 and 5.

Units 1, 2, and 3 have not been operated since January 1, 2014, and the operator has been begun the process to dismantle those units. Accordingly, it is reasonable to add a statement regarding the status of those units. This revision, if finalized as proposed, would not relax any requirement or affect the stringency of the FIP. This proposed change to update the FIP would not have any effect on air quality in the area surrounding FCPP.

2. Revisions to 40 CFR 49.5512(c)

Paragraph (c) defines certain terms used in the FIP. As discussed elsewhere, the EPA is proposing to add a new paragraph (k) that includes provisions, including a separate set of definitions, from the Consent Decree. Therefore, to avoid confusion associated with slight differences that may exist between terms common to both sets of definitions, we are proposing to specify that the definitions in paragraph (c) apply to paragraph (a) through (j). This revision, if finalized as proposed, would not relax any requirement or affect the stringency of the FIP, and would not have any effect on air quality in the area surrounding FCPP.

Consistent with the proposed revisions to paragraph (a), the EPA is proposing to remove portions of definitions for shutdown and startup (at paragraph (c)(12) and (13)), related to Units 1, 2, and 3, in order to update the FIP to reflect current operating conditions. Because these units were retired by January 1, 2014, these revisions, if finalized as proposed, would not relax any requirements or affect the stringency of the FIP as contemplated by CAA section 110(l). These proposed changes to update the FIP would not have any effect on air quality in the area surrounding FCPP.

The EPA is also proposing to remove definitions and provisions in paragraph 49.5512(c) that provide an affirmative defense for malfunction episodes. After the EPA's promulgation of the 2007 FIP, the United States Court of Appeals for the District of Columbia (“D.C. Circuit”) ruled that CAA sections 113 (federal enforcement) and 304 (citizen suits) preclude EPA from creating affirmative defense provisions in the Agency's own regulations imposing emission limitations on sources.25 The D.C. Circuit found that such affirmative defense provisions purport to alter the jurisdiction of federal courts to assess liability and impose penalties for violations of those limits in private civil enforcement cases. The D.C. Circuit's holding makes clear that the CAA does not authorize promulgation of such a provision by the EPA. In particular, the D.C. Circuit's decision turned on an analysis of CAA sections 113 and 304. These provisions apply with equal force to a civil action brought to enforce the provisions of a FIP. The logic of the D.C. Circuit's decision thus applies to the promulgation of a FIP, and precludes the EPA from including an affirmative defense provision in a FIP.26 For these reasons, the EPA is proposing to delete the provision in the FIP that provides an affirmative defense for exceedances of emission limitations that occur during malfunctions at FCPP. This proposed revision, if finalized, will not relax any requirements in the FIP and would not have any adverse effects on air quality in the area. Additionally, by removing an inconsistency between the FIP and the EPA's more recently promulgated regulations and the 2015 SSM Action, the proposed revision provides more clarity and certainty.

25See NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014).

26See February 4, 2013 Memorandum to Docket EPA-HQ-OAR-2012-0322: “State Implementation Plans: Response to Petition for Rulemaking; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown, and Malfunction; Statutory, Regulatory, and Policy Context for this Rulemaking.”

3. Revisions to 40 CFR 49.5512(d)

The EPA is proposing to add a statement to make clear that the emission limitations under 40 CFR 49.5512(d) apply continuously and at all times. Exemptions from emission limitations during any mode of source operation are contrary to CAA requirements. CAA section 110(a)(2)(A) requires SIPs to include, among other requirements, “enforceable emission limitations.” Section 302(k) of the CAA defines an emission limitation as: “a requirement established by the State or the Administrator which limits the quantity, rate, or concentration of emissions of air pollutants on a continuous basis, including any requirement relating to the operation or maintenance of a source to assure continuous emission reduction, and any design, equipment, work practice or operational standard promulgated under this Act.” The courts have held that the plain meaning of the term “continuous” does not allow exemptions from emission limitations.27 For these reasons, the EPA is proposing to add a statement to clarify in 40 CFR 49.5512(d) that the emission limitations in that paragraph apply at all times. This proposed revision, if finalized, would strengthen the existing emission limitations by clarifying that the limits are applicable at all times, including during periods of startup and shutdown.

Under paragraph (d)(2), the EPA is proposing to delete the portion of the PM emission limitation that specifies requirements related to the test duration and minimum collection volume for PM testing. Generally, the testing requirements for PM and other pollutants are found in paragraph (e). To improve clarity of the regulation, the EPA is proposing to delete the provisions in paragraph (d)(2) that relate to testing and rely solely on paragraph (e) to specify the requirements for test methods. This proposed revision, if finalized, would not relax any requirements and would not affect air quality in the area surrounding FCPP.

Under paragraph (d)(3), we are proposing to delete the requirements for dust control. The EPA promulgated paragraph (d)(3) as part of the 2007 FIP. Following final action on the 2007 FIP, the operator of FCPP filed a petition for review, claiming, among other things, that the EPA had not provided an adequate explanation for promulgating the dust control requirements.28 In the litigation, the EPA agreed that the dust control requirements should be remanded and vacated because the 2007 FIP did not contain an adequate explanation of its rationale. On November 13, 2008, the EPA issued a final rule to stay the effectiveness of the dust control requirements at paragraph (d)(3).29 In the EPA's 2012 action to implement the BART requirements for FCPP, the EPA proposed and finalized dust control measures in the FCPP FIP at paragraph (j) that were consistent with the requirements in paragraph (d)(3) requiring submission of a dust control plan and compliance with a 20-percent opacity limit.30 The proposal provided the EPA's rationale for establishing dust control requirements, and these requirements were not challenged in the final 2012 FIP. Because the requirements in paragraph (d)(3) were stayed in 2008 and replaced by paragraph (j) in 2012, which remains in effect, the EPA's proposal to remove the dust control requirements at paragraph (d)(3) would not relax any requirements and would not have any effects on air quality in the area surrounding FCPP.

Paragraph (d)(4) establishes a requirement that the discharge of emissions from the stacks of Units 4 and 5 shall not exhibit greater than 20 percent opacity, excluding uncombined water droplets. We are proposing to delete the exclusion of uncombined water droplets from the opacity standard. This specific exclusion of water vapor is inconsistent with the 2015 SSM Action. The exclusion is also inconsistent with the EPA's treatment of opacity in other rulemakings. For example, although FCPP is not subject to the New Source Performance Standard (NSPS) for electric generating units at 40 CFR part 60 subpart Da, the subpart Da standard does not include a specific exclusion for water vapor in the opacity standard.31 However, it does include provisions for addressing interference of water vapor with the COMS by providing alternative monitoring requirements to assure continuous monitoring of baghouse performance.32 In addition, subpart B to 40 CFR part 75 includes an exemption from the opacity monitoring requirements of part 75 (i.e., COMS) for units with wet flue gas pollution control systems where it is demonstrated that condensed water is present and impedes the accuracy of opacity measurements.33 Generally, these alternatives for addressing water vapor interference would be invoked for systems that consistently experience saturated stack conditions.

31See 40 CFR part 60 subpart Da at 60.42Da(b). Subpart Da to part 60 is the “Standard of Performance for Electric Utility Steam Generating Units” and applies to units that are capable of combusting more than 73 MW heat input of fossil fuel and for which construction, modification, or reconstruction commenced after September 18, 1978. The units at FCPP were constructed prior to 1978 and are not subject to part 60 subpart Da.

32See 40 CFR part 60 subpart Da 60.49Da(a).

33See 40 CFR part 75 subpart B at 75.14.

The EPA promulgated the exclusion of uncombined water droplets in the 2007 FIP to address the technical challenge at FCPP associated with the use of COMS to monitor opacity when the stacks are saturated.34 Currently, the scrubbers for SO2 control at FCPP operate with a bypass specifically to avoid saturated stack conditions given the physical limitations of the existing unlined stacks.35 Furthermore, we understand from the operator of FCPP that Units 4 and 5 infrequently experience high opacity readings as a result of water vapor interference, and the limited instances generally resulted from equipment or process issues.36

34See 72 FR 25698 at 25701 (May 7, 2007).

35 We note that the Consent Decree requires the operator to modify the existing ductwork at FCPP to withstand saturated conditions in order to eliminate the bypass. See proposed regulatory text at 40 CFR 49.5512(k)(3)(ii).

36See document titled “Opacity Exceedances due to Saturated Stack.docx,” in the docket for this rulemaking, showing three opacity exceedances from Units 4 and 5 combined due to wet stack conditions over 2011-2015, generally resulting from equipment malfunction.

The EPA is proposing to remove the provisions exempting water vapor from the opacity standard and the associated monitoring and reporting requirements because these exemptions are inconsistent with the 2015 SSM Action, stating that emission standards must apply at all times, including periods of malfunction. Our proposal, to remove the water vapor exemption from the opacity standard and monitoring requirements, represents a strengthening of the FIP. Therefore, we anticipate that this proposed revision would not have any adverse effects on air quality in the surrounding area.

Under paragraph (d)(4), we are also proposing to add a provision that any unit for which the owner or operator installs, calibrates, maintains, and operates a PM CEMS to demonstrate compliance with a PM emission limitation shall be exempt from the opacity standard in paragraph (d)(4), and the associated monitoring and recordkeeping requirements in paragraphs (e) and (f). This provision is consistent with the provisions of the NSPS at 60.42Da(b)(1) and the Acid Rain Program requirements at 40 CFR 75.14(e), which generally provides that any owner or operator that elects to install, calibrate, maintain, and operate a CEMS for measuring PM emissions is exempt from the opacity standard and monitoring requirements.37 The PM CEMS is a monitoring system that provides a continuous assessment of compliance with a PM limit. Generally, opacity standards and COMS have been used as a surrogate to ensure continuous compliance with a PM emission standard that would otherwise be subject to periodic source testing.38 As noted above, FCPP is not subject to the NSPS at 60.42Da. However, we are proposing to follow the same rationale from Subpart Da to exempt any unit from the opacity standard and COMS requirement if a PM CEMS is installed on that unit and used for determining continuous compliance with its PM emission limitation.

37See also 77 FR 9304 (February 16, 2012).

38See, e.g., discussion of opacity in the 2007 FIP for FCPP, 72 FR 25698 at 25701 (May 7, 2007), stating that opacity limits are generally applied to ensure a unit is meeting its PM limit.

As discussed elsewhere in this proposed rule, the Consent Decree requires the operator of FCPP, by early 2017, to install PM CEMS and, by mid-2018, to make modifications to the stacks to withstand saturated conditions to allow greater SO2 removal efficiency (by reducing or eliminating the existing scrubber bypass). After these stack modifications are made in 2018, we anticipate that the units at FCPP will more consistently experience saturated stack conditions that may impede the accuracy of opacity measurements. We consider the use of PM CEMS to be an improvement upon the use of an opacity standard and COMS as a surrogate for measuring continuous compliance with PM limits, particularly for wet stacks. Therefore, the EPA does not consider these revisions to relax any requirements or to result in any adverse effects on air quality in the surrounding area.

The last proposed revision under paragraph (d) is to remove the emission limitation for NOX that applied to Units 1, 2, and 3 at FCPP under 40 CFR 49.5512(d)(5)(i). The owner or operator permanently ceased operation of Units 1, 2, and 3 by January 1, 2014; therefore, removal of the emission limitations for these retired units specified in paragraph (d)(5)(i) would not relax any requirements or have any effect on air quality in the area surrounding FCPP.

4. Revisions to 40 CFR 49.5512(e)

Paragraph (e) of 40 CFR 49.5512 generally relates to testing and monitoring requirements that follow in subparagraphs (e)(1)-(e)(8). Under paragraph (e), prior to subparagraph (e)(1), we are proposing to remove specific provisions for particulate matter testing and to move revised provisions for PM to subparagraph (e)(3). The EPA is proposing this revision to improve the clarity of the regulatory requirements. Therefore, this proposed revision, to address testing and monitoring requirements elsewhere, within specific sub-paragraphs in paragraph (e), would not relax any requirements or affect air quality in the surrounding area. We address the specific provisions related to revisions to the PM testing and monitoring provisions in a separate discussion on paragraph (e)(3).

In paragraph (e), we are also proposing to remove provisions related to opacity and move revised opacity monitoring requirements to paragraph (e)(6). We are proposing to remove the existing opacity monitoring exemption for periods when the stack is saturated and to remove the presumption that high opacity readings that occur when the baghouse is operating within normal parameters is caused by water vapor and shall not be considered a violation. As outlined in our justification for proposed revisions to paragraph (d)(4), the existing exemptions for opacity monitoring for periods of saturated stacks are inconsistent with the EPA's interpretation of CAA requirements to prohibit emission limitation exemptions and affirmative defenses applicable to excess emissions during malfunctions. The proposed revisions to the opacity standard and monitoring requirements strengthen the FIP and therefore, these changes would not affect air quality in the surrounding area.

In paragraph (e)(1), we are proposing to remove the provision specifying a compliance deadline for installing CEMS for SO2, NOX, and a diluent because the CEMS for those pollutants have already been installed. The EPA is not revising the provisions related to the required operation, maintenance, or certification of the CEMS. Because we are proposing to delete a requirement that merely establishes a compliance date that has already been met, this proposed revision would not relax any requirements or affect air quality in the surrounding area.

In paragraph (e)(3), the EPA is proposing to revise the annual PM testing requirements to require the owner or operator to either: Conduct PM testing in accordance with the quarterly testing specifications in the MATS Rule (see Table 5, 40 CFR part 63, subpart UUUUU); to install, calibrate, maintain, and operate a CPMS on each unit in accordance with the MATS Rule (see 40 CFR part 63, subpart UUUUU); or to install, calibrate, maintain, and operate a PM CEMS on each unit, in accordance with the MATS Rule (see 40 CFR part 63, subpart UUUUU). Currently, paragraph (e)(3) requires annual PM testing. We are proposing to align the PM testing requirement in the 2007 FIP with the testing requirements in the MATS Rule, which includes either quarterly testing or continuous monitoring. Therefore, this proposed revision would increase the frequency of PM testing required in the FIP from an annual basis to either a quarterly or a continuous basis. In addition, the testing provisions in the MATS Rule generally refer to the same test methods as those already referenced elsewhere in the FCPP FIP in paragraphs (e) and (i)(1), e.g., 40 CFR part 60 Appendices A-1 through A-3, Methods 1 through 4, and Method 5. Therefore, this proposed revision streamlines testing for PM, does not relax any other requirements, and makes the testing requirements for PM under the FIP consistent with the PM testing requirements in a recent national rulemaking. This proposed revision would not have adverse impacts on air quality in the surrounding area.

In paragraph (e)(6), we are proposing to clarify that this opacity monitoring provision applies only to units at FCPP that are subject to the opacity standard at paragraph (d)(4). As discussed elsewhere in this proposed rule, we are proposing that the opacity standard would apply only if the owner or operator does not elect to monitor compliance with the PM limit using PM CEMS. If the opacity standard applies, under paragraph (e)(6) we are proposing three options for determining compliance with the opacity standard. The first option specifies separate compliance demonstrations for the opacity standard under dry and wet conditions. When the stack is dry (unsaturated), we are proposing to continue to require use of the existing COMS. However, during periods of wet (saturated) stack conditions, which are currently infrequent, the condensed water vapor may impede the accuracy of opacity measurements. Therefore, anticipating that saturated stack conditions at FCPP may occur more frequently in the future, we are proposing to require the owner or operator to demonstrate compliance with the opacity standard during saturated stack conditions using visible emission performance testing. We consider the visible emission compliance demonstrations to provide reasonable demonstrations of compliance with the opacity standard during these infrequent occurrences. However, when the stacks at FCPP are lined to eliminate the scrubber bypass and result in consistently saturated stacks, continuous visible emission performance tests may be impractical. Therefore, we are proposing two additional options for determining compliance with the opacity standard. Both options are provided in 40 CFR part 60 subpart Da as alternatives to COMS for units experiencing interference from water vapor.39 In paragraph (e)(6)(ii), we are proposing a second option that requires the installation and maintenance of a CPMS, in accordance with the MATS Rule at 40 CFR part 63 subpart UUUUU, combined with periodic visible emission testing in accordance with 40 CFR 60.49Da(a)(3). In paragraph (e)(6)(iii), we are proposing a third option that requires monitoring performance of the existing baghouses using a bag leak detection system in accordance with 40 CFR 60.48Da(o)(4), or an alternative bag leak detection system approved by the EPA, combined with periodic visible emission testing in accordance with 40 CFR 60.49Da(a)(3).40 As discussed elsewhere in this notice, the proposed revisions to the opacity standard and monitoring requirements would strengthen the FIP and benefit air quality in the surrounding area because they remove existing exemptions in the FIP and provide reasonable alternatives to address saturated stack conditions in a manner that is consistent with other national rulemakings.

39See 40 CFR 60.49Da(2)(i) and 60.49Da(a)(4)(ii).

40 Under 40 CFR 60.13(h)(3)(i), the Administrator may approve alternatives to any monitoring procedures or requirements of part 60.

Because Units 1, 2, and 3 have permanently ceased operation, we are proposing to delete the testing requirements for those units in paragraph (e)(8). Removal of the testing requirements for these retired units would not relax any requirements or have any effect on air quality in the area surrounding FCPP.

5. Revisions to 40 CFR 49.5512(f)

The EPA is proposing revisions to the reporting and recordkeeping requirements to provide additional clarity that all reports and notifications required in paragraph (f), (f)(4), and (f)(4)(ii) must be submitted to the NNEPA and the EPA. Within the recordkeeping and reporting requirements in paragraph (f), we are proposing changes to clarify that any reports that are required to be submitted to the Regional Administrator or the Administrator must be submitted to the Director of NNEPA and to the Air Division Director at Region IX office of the EPA. We are also revising paragraph (f) to require that the Director of the Enforcement Division, in addition to the Director of the Air Division, at the Region IX office of the EPA, be provided reports and notifications. These proposed revisions do not relax any requirements or have any effect on air quality in the area surrounding FCPP.

Paragraph (f)(1) requires notification and recordkeeping requirements for the CEMS. The EPA is proposing to add the COMS and visible emission testing to the notification and recordkeeping requirements in this paragraph. These proposed revisions do not relax any requirements and would not adversely affect air quality in the area surrounding FCPP.

In paragraph (f)(3), we are proposing to delete the specification related to the frequency of particulate matter testing but are not proposing to modify any provisions related to PM testing reports to the EPA. As discussed elsewhere, we are proposing modifications to the PM testing requirements to align with the MATS Rule, which provides three options for demonstrating compliance with the PM emission limitations: Quarterly stack tests, CPMS, or PM CEMS. Deleting the specification in paragraph (f)(3) that PM testing occurs annually is consistent with the proposed revision to align the PM testing and monitoring requirements for FCPP with those of the MATS Rule.

In addition, in paragraphs (f)(4)(i) and (f)(4)(ii), we are proposing to delete the mailing addresses and other details related to reporting requirements, as they are redundant to the provisions in paragraph (f). All reports and notifications under paragraph (f) must be submitted to the NNEPA and the EPA, and we are proposing to clarify under paragraph (f) that all references to the Regional Administrator in that paragraph mean the Directors of the NNEPA and two divisions within the EPA Region IX office. Paragraph (f)(4) repeats addresses and other details already stated in paragraph (f). The EPA is proposing to delete these redundant provisions in paragraph (f)(4). We anticipate this revision would improve regulatory clarity and would have no impact on air quality in the surrounding area.

Consistent with the proposed revisions to the opacity standard and COMS requirement in paragraphs (d) and (e), we are proposing to delete references to saturated stack conditions in paragraphs (f)(4)(i) and (f)(4)(i)(H). In paragraph (f)(4)(i)(G), we are also proposing to require the owner or operator to report opacity exceedances determined from the visible emission performance tests. As discussed elsewhere in this notice, because provisions in the existing FCPP FIP exempt the units from the opacity limit during periods where the stacks were saturated, the removal of the exemption represents a strengthening of the FIP and would not relax other requirements in the FCPP FIP.

6. Revisions to 40 CFR 49.5512(h)

The EPA is proposing to delete the startup and shutdown exemptions for the opacity and PM emission limitations at paragraph (h)(2) and to delete the provisions related to an affirmative defense for malfunctions in paragraph (h)(3). As discussed previously, exemptions from emission limitations and provisions that allow an affirmative defense are inconsistent with CAA requirements. Using the same rationale we provided elsewhere in this notice, for the proposed revisions to 40 CFR 52.5512(c) and (d), the EPA is proposing to delete the provisions at paragraph (h)(2) that provide an exemption from emission limitations during periods of startup and shutdown and also to delete the provisions in the paragraph (h)(3) that provide an affirmative defense for malfunctions at FCPP. The proposed removal of these provisions strengthens the FIP and does not relax any other requirements in the FIP. Therefore, the removal of these revisions would not adversely affect air quality in the surrounding area.

7. Revisions to 40 CFR 49.5512(i)

Under paragraph (i)(1), promulgated in the 2012 FIP, the EPA is proposing to delete the existing provisions related to annual PM testing and add a provision that PM testing shall be performed in accordance with paragraph (e)(3), which requires quarterly PM testing, or installation, calibration, and operation of CPMS, or PM CEMS, in accordance with the MATS Rule. This proposed revision would increase the frequency of PM testing from an annual basis to either a quarterly or continuous basis. The testing provisions in the MATS Rule generally refer to the same test methods already referenced in the FIP in paragraphs (e) and (i)(1), e.g., 40 CFR part 60 Appendices A-1 through A-3, Methods 1 through 4, and Method 5. This proposed revision would not relax any requirements and would make the testing requirements for PM under the FIP consistent with the PM testing requirements in recent national rulemakings. Therefore, this revision would not have adverse impacts on air quality in the surrounding area.

In addition, under paragraph (i)(2)(iii) of the 2012 FIP, we are proposing to correct a typographical error in a citation. Paragraph (i)(2)(iii) provides the schedule for the installation of add-on post-combustion NOX controls and refers to interim emission limitations for NOX at paragraph (i)(2)(ii)(A). However, the interim emission limitations are found in paragraph (i)(2)(ii), and subparagraph (A) to paragraph (i)(2)(ii) does not exist. Although the interim limits under paragraph (i)(2)(ii) do not apply because the owner or operator elected to implement paragraph (i)(3) in lieu of paragraph (i)(2) for NOX, the EPA is proposing to correct this error in order to improve regulatory clarity. This proposed revision would have no effect on air quality in the surrounding area.

8. Addition of 40 CFR 49.5513(k)

The EPA is proposing to add paragraph (k) to include provisions required for compliance with the Consent Decree. The EPA is not revisiting or opening for comment any of the specific requirements of the Consent Decree and is requesting comment only on whether the EPA has incorporated all appropriate requirements from the Consent Decree into the FIP. Generally, the Consent Decree established emission limitations and other requirements to reduce emissions of SO2, NOX and PM. The Consent Decree requires the owner or operator to modify the existing ductwork and stacks for Units 4 and 5 to accommodate a wet stack in order to eliminate the need to bypass flue gas around the scrubbers and to achieve and maintain an SO2 removal efficiency of at least 95 percent, which is more stringent than the requirement to achieve an 88 percent removal efficiency in paragraph (d)(1)(i). The Consent Decree also established an emission limitation for NOX of 0.080 lb/MMBtu, which is more stringent than the NOX limit of 0.098 lb/MMBtu in 40 CFR 49.5512(i)(3) from the 2012 FIP. Finally, the Consent Decree established a PM emission limitation of 0.0150 lb/MMBtu for Units 4 and 5, which is more stringent than the PM limit of 0.015 lb/MMBtu that was applied to those units in the 2012 FIP. Because the Consent Decree set more stringent emission limitations, the proposed revision to incorporate the provisions of the Consent Decree into the FIP for FCPP strengthens the FIP and would not relax any existing requirements. In this action, the EPA is merely proposing to incorporate the existing Consent Decree requirements into the FIP for FCPP and is requesting comment only on whether the EPA has incorporated all appropriate requirements from the Consent Decree into the FIP. The Consent Decree is anticipated to benefit air quality, and the proposed inclusion of the Consent Decree requirements in the FIP would make those requirements continue to be federally enforceable after the Consent Decree is terminated.

C. Compliance Schedule

The EPA proposes that the requirements contained in this proposal will become enforceable on the effective date following final promulgation of this FIP revision unless otherwise provided in a specific provision of the FIP.

IV. Proposed Action and Solicitation of Comments

As described above, the EPA proposes revisions to the FCPP FIP for several reasons: (1) To make certain provisions in the FIP consistent with national rulemakings and other actions since 2012; (2) to update the FIP to reflect recent operating changes; and (3) to add new provisions to the FIP to include the requirements of the Consent Decree.

The EPA solicits comments on the limited revisions of the FCPP FIP that we are proposing in this rulemaking. We are also soliciting comment on whether the EPA has accurately incorporated the requirements from the Consent Decree into paragraph (k) of the FIP. We are not accepting comment on any provisions of the FCPP FIP that we are not proposing to revise, and we are not accepting comment on the specific requirements of the Consent Decree. Accordingly, please limit your comments to those specific provisions recited above that we are proposing to revise in today's action.

V. Environmental Justice Considerations

The Four Corners Power Plant is located on the reservations lands of the Navajo Nation, and the EPA recognizes there is significant community interest in the emissions and environmental effects of this facility. As discussed elsewhere in this document, the proposed revisions to the FCPP FIP would: Strengthen the FIP by removing emission limitation exemptions for periods of startup, shutdown, and saturated stacks; remove an affirmative defense applicable to excess emissions during malfunctions; and codify more stringent emission limitations for SO2, NOX, and PM from a Consent Decree dated August 17, 2015. Additional revisions to the FCPP FIP proposed in this notice, including to streamline certain testing requirements to be consistent with national rulemakings promulgated since 2008 and to remove requirements for units that have permanently ceased operation, would not relax any condition in the FCPP FIP. Therefore, the EPA considers this proposed action to be beneficial for human and environmental health, and to have no potential disproportionately high and adverse effects on minority, low-income, or indigenous populations.

VI. Statutory and Executive Order ReviewsA. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

B. Paperwork Reduction Act (PRA)

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. This rule applies to only one facility. Therefore, its recordkeeping and reporting provisions do not constitute a “collection of information” as defined under 44 U.S.C. 3502(3) and 5 CFR 1320.3(c).

C. Regulatory Flexibility Act (RFA)

I certify that this proposed action will not have a significant economic impact on a substantial number of small entities. This action will not impose any requirements on small entities. Firms primarily engaged in the generation, transmission, and/or distribution of electric energy for sale are small if, including affiliates, the total electric output for the preceding fiscal year did not exceed four million megawatt-hours. Each of the owners of the facility (i.e., Arizona Public Service, Salt River Project, Tucson Electric Power, and El Paso Electric) affected by this rule exceed this threshold.

D. Unfunded Mandates Reform Act (UMRA)

This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments.

E. Executive Order 13132: Federalism

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This action does not have tribal implications, as specified in Executive Order 13175. Although this proposed action affects a facility located in Indian country, the proposed limited revisions to existing provisions in the FIP for FCPP, and the incorporation of provisions into the FIP from a Consent Decree, which has already undergone public review and was the subject of tribal consultation, will not have substantial direct effects on any Indian tribes, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes. Thus, Executive Order 13175 does not apply to this action. However, we note that we have engaged in numerous discussions with the NNEPA during the development of this proposed rule and continue to invite consultation on this proposed action.

G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

EPA interprets EO 13045 as applying only to those regulatory actions that concern health or safety risks that EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk.

This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

This action involves technical standards. The technical standards in this action are based on the technical standards used in other rulemakings promulgated by the EPA. We refer to the discussion of the technical standards and voluntary consensus standards in the final rule for 40 CFR part 60 subpart Da and 40 CFR part 63 subpart UUUUU at 77 FR 9304 at 9441 (February 16, 2012).

The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations. If this rule is finalized as proposed, we expect that the limited revisions to the FIP will strengthen requirements for periods of startup, shutdown, and malfunction and will not relax any other existing requirements. Additional revisions related to streamlining of PM testing and providing options for PM and opacity testing that are in accordance with other rulemakings from the EPA will not affect air quality in the area surrounding FCPP.

(a) Applicability. The provisions of this section shall apply to each owner or operator of the coal burning equipment designated as Units 1, 2, 3, 4, and 5 at the Four Corners Power Plant (the Plant) on the Navajo Nation Indian Reservation located in the Four Corners Interstate Air Quality Control Region (see 40 CFR 81.121). Units 1, 2, and 3 at the Four Corners Power Plant permanently ceased operation by January 1, 2014, pursuant to the requirements of paragraph (i)(3).

(c) Definitions. For the purposes of paragraphs (a)-(j):

(1) [Reserved]

(7) Malfunction means any sudden and unavoidable failure of air pollution control equipment or process equipment or of a process to operate in a normal or usual manner.

(12) Shutdown means the cessation of operation of any air pollution control equipment, process equipment, or process for any purpose. For Units 4 or 5, shutdown begins when the unit drops below 300 MW net load with the intent to remove the unit from service.

(13) Startup means the setting into operation of any air pollution control equipment, process equipment, or process for any purpose. For Units 4 or 5, startup ends when the unit reaches 400 MW net load.

(d) Emissions Standards and Control Measures. The following emission limits shall apply at all times.

(2) Particulate Matter. No owner or operator shall discharge or cause the discharge of particulate matter from any coal burning equipment into the atmosphere in excess of 0.050 pounds per million British thermal unit (lb/MMBtu) of heat input (higher heating value).

(3) [Reserved].

(4) Opacity. No owner or operator shall discharge or cause the discharge of emissions from the stacks of Units 4 and 5 into the atmosphere exhibiting greater than 20 percent opacity, averaged over any six (6) minute period, except for one six (6) minute period per hour of not more than 27 percent opacity. Any unit for which the owner or operator installs, calibrates, maintains, and operates particulate matter CEMS under paragraph (e)(3) of this section shall be exempt from this opacity standard in this paragraph (d)(4) and associated requirements in paragraphs (e) and (f) to demonstrate compliance with the opacity standard.

(5) Oxides of nitrogen. No owner or operator shall discharge or cause the discharge of NOX into the atmosphere in excess of the amounts specified below.

(i) 0.65 lb/MMBtu of heat input per unit averaged over any successive thirty (30) boiler operating-day period from Units 4 and 5;

(ii) 335,000 lb per 24-hour period when coal-burning equipment is operating, on a plant-wide basis; for each hour when coal-burning equipment is not operating, this limitation shall be reduced. If the unit which is not operating is Unit 1, 2, or 3, the limitation shall be reduced by 1,542 lb per hour for each unit which is not operating. If the unit which is not operating is Unit 4 or 5, the limitation shall be reduced by 4,667 lb per hour for each unit which is not operating.

(e) Testing and Monitoring. Compliance with the emissions limits set for SO2 and NOX shall be determined by using data from a CEMS unless otherwise specified in paragraphs (e)(2) and (e)(4) of this section.

(1) The owner or operator shall maintain and operate CEMS for SO2, NO or NOX, and a diluent, and for Units 4 and 5 only, COMS, in accordance with 40 CFR 60.8 and 60.13, and appendix B of 40 CFR part 60. Completion of 40 CFR part 75 monitor certification requirements shall be deemed to satisfy the requirements under 40 CFR 60.8 and 60.13 and appendix B of part 60. The owner or operator shall comply with the quality assurance procedures for CEMS found in 40 CFR part 75, and all reports required thereunder shall be submitted to the Regional Administrator. The owner or operator shall provide the Regional Administrator notice in accordance with 40 CFR 75.61.

(3) To assure continuous compliance with the particulate matter limits in paragraph (d)(2), the owner or operator shall either conduct particulate matter testing in accordance with the testing specifications outlined in Table 5 of 40 CFR part 63 subpart UUUUU, or install, calibrate, operate, and maintain a continuous parametric monitoring system (CPMS) for that unit in accordance with 40 CFR part 63 subpart UUUUU, or install, calibrate, maintain, and operate particulate matter CEMS in accordance with 40 CFR part 63 subpart UUUUU. The owner or operator shall submit a written notification, in accordance with paragraph (f), of intent to demonstrate compliance with this paragraph by using a CPMS or PM CEMS. This notification shall be sent at least 30 calendar days before the initial startup of the monitor for compliance determination purposes. The owner or operator may discontinue operation of the monitor and instead return to demonstration of compliance with this paragraph using quarterly PM testing by submitting written notification, in accordance with paragraph (f), of such intent at least 30 calendar days before shutdown of the monitor for compliance determination purposes. Nothing in this paragraph replaces or supersedes the requirements for PM CEMS in the August 17, 2015 Consent Decree under paragraph (k).

(6) If the opacity standard in paragraph (d)(4) applies, the owner or operator shall demonstrate compliance with the opacity standard using one of the following options:

(i) Operate Continuous Opacity Monitoring Systems (COMS) and maintain a set of opacity filters to be used as audit standards. Compliance with the opacity standard during periods of dry (unsaturated) stack conditions shall be determined using COMS. Compliance with the opacity standard during periods of wet (saturated) stack conditions shall be determined using visible emission performance testing specified in 40 CFR part 60 appendix A-4 Method 9 during the duration of the saturated stack condition, or

(ii) Install, calibrate, operate, and maintain a continuous parametric monitoring system (CPMS) for that unit in accordance with 40 CFR part 63 subpart UUUUU, including the requirements for the development of site-specific monitoring plans and recordkeeping and reporting; and conduct periodic performance testing of visible emissions using the procedures specified in paragraphs 40 CFR 60.49Da(a)(3), or

(iii) monitor performance of the baghouses using a bag leak detection system in accordance with 40 CFR 60.48Da(o)(4), or an alternative bag leak detection system approved by the EPA, including requirements for the development of site-specific monitoring plans and recordkeeping and reporting; and conduct periodic performance testing of visible emissions using the procedures specified in paragraphs 40 CFR 60.49Da(a)(3).

(8) [Reserved]

(f) Reporting and Recordkeeping Requirements. All requests, reports, submittals, notifications, and other communications to the Regional Administrator or Administrator required by this paragraph (f) and references therein shall be submitted to the Director, Navajo Nation Environmental Protection Agency, P.O. Box 339, Window Rock, Arizona 86515, (928) 871-7692, (928) 871-7996 (facsimile); to the Director, Air Division, U.S. Environmental Protection Agency, Region IX, to the attention of Mail Code: AIR-3, at 75 Hawthorne Street, San Francisco, California 94105, (415) 972-397490, (415) 947-3579 (facsimile); and to the Director, Enforcement Division, U.S. Environmental Protection Agency, to the attention of Mail Code ENF-2-1, at 75 Hawthorne Street, San Francisco, California, 94105, (415) 972-3982, or by email to r9.aeo@epa.gov. For each unit subject to the emissions limitation in this section and upon completion of the installation of CEMS and COMS as required in this section, the owner or operator shall comply with the following requirements:

(1) For each emissions limit in this section, comply with the notification and recordkeeping requirements for CEMS and COMS compliance monitoring in 40 CFR 60.7(c) and (d), and for visible emissions testing, if applicable under paragraph (e)(6), record and report results of the test in accordance with 40 CFR 60.7(d).

(3) Furnish the Regional Administrator with reports describing the results of the particulate matter emissions tests postmarked within sixty (60) days of completing the tests. Each report shall include the following information:

(4) * * *

(i) For excess emissions, the owner or operator shall notify the Regional Administrator by telephone or in writing within one business day (initial notification). A complete written report of the incident shall be submitted within ten (10) working days of the initial notification. The complete written report shall include:

(G) For an opacity exceedance, the 6-minute average opacity monitoring data or visible emission performance test results greater than 20 percent opacity for the 24 hours prior to and during the exceedance for Units 4 and 5; and

(H) The efforts taken or being taken to minimize the excess emissions and to repair or otherwise bring the Plant into compliance with the applicable emissions limit(s) or other requirements.

(ii) If the period of excess emissions extends beyond the submittal of the written report, the owner or operator shall also notify the Regional Administrator in writing of the exact time and date when the excess emissions stopped. Compliance with the excess emissions notification provisions of this section shall not excuse or otherwise constitute a defense to any violations of this section or of any law or regulation which such excess emissions or malfunction may cause.

(i) * * *

(1) Particulate Matter from Units 4 and 5 shall be limited to 0.015 lb/MMBtu for each unit. Particulate matter testing shall be performed in accordance with paragraph (e)(3) of this section.

(2) * * *

(iii) * * *

(A) Within 4 years of the effective date of this rule, FCPP shall have installed add-on post-combustion NOX controls on at least 750 MW (net) of generation to meet the interim emission limit in paragraph (i)(2)(ii) of this section.

(k) Emission limitations from August 17, 2015 Consent Decree. The emission limitations and other requirements from this paragraph (k), originally contained in a Consent Decree filed on August 17, 2015 in the United States District Court for the District of New Mexico, are in addition to the requirements in paragraphs (a) through (j) of this section.

(1) Definitions. Every term expressly defined in this paragraph (k) shall have the meaning given that term herein. Every other term used in this paragraph (k) that is also a term used under the Act or in a federal regulation implementing the Act shall mean what such term means under the Act or those regulations.

(i) A “30-Day Rolling Average NOX Emission Rate” for a Unit shall be expressed in lb/MMBtu and calculated in accordance with the following procedure: First, sum the total pounds of NOX emitted from the Unit during the current Unit Operating Day and the previous twenty nine (29) Unit Operating Days; second, sum the total heat input to the Unit in MMBtu during the current Unit Operating Day and the previous twenty-nine (29) Unit Operating Days; and third, divide the total number of pounds of NOX emitted during the thirty (30) Unit Operating Days by the total heat input during the thirty (30) Unit Operating Days. A new 30-Day Rolling Average NOX Emission Rate shall be calculated for each new Unit Operating Day. Each 30-Day Rolling Average NOX Emission Rate shall include all emissions that occur during all periods within any Unit Operating Day, including emissions from startup, shutdown, and Malfunction.

(ii) A “30-Day Rolling Average SO2 Removal Efficiency” means the percent reduction in the mass of SO2 achieved by a Unit's FGD system over a thirty (30) Unit Operating Day period and shall be calculated as follows: Step one, sum the total pounds of SO2 emitted as measured at the outlet of the FGD system for the Unit during the current Unit Operating Day and the previous twenty-nine (29) Unit Operating Days as measured at the outlet of the FGD system for that Unit; step two, sum the total pounds of SO2 delivered to the inlet of the FGD system for the Unit during the current Unit Operating Day and the previous twenty-nine (29) Unit Operating Days as measured at the inlet to the FGD system for that Unit (this shall be calculated by measuring the ratio of the lb/MMBtu SO2 inlet to the lb/MMBtu SO2 outlet and multiplying the outlet pounds of SO2 by that ratio); step three, subtract the outlet SO2 emissions calculated in step one from the inlet SO2 emissions calculated in step two; step four, divide the remainder calculated in step three by the inlet SO2 emissions calculated in step two; and step five, multiply the quotient calculated in step four by 100 to express as a percentage of removal efficiency. A new 30-Day Rolling Average SO2 Removal Efficiency shall be calculated for each new Unit Operating Day, and shall include all emissions that occur during all periods within each Unit Operating Day, including emissions from startup, shutdown, and Malfunction.

(iii) “Annual Tonnage Limitation” means the limitation on the number of tons of the pollutant in question that may be emitted from FCPP during the relevant calendar year (i.e., January 1 through December 31), and shall include all emissions of the pollutant emitted during periods of startup, shutdown and Malfunction.

(v) “Clean Air Act” and “the Act” mean the federal Clean Air Act, 42 U.S.C. 7401-7671q, and its implementing regulations.

(vi) “CEMS” and “Continuous Emission Monitoring System,” mean, for obligations involving the monitoring of NOX and SO2 emissions under this paragraph (k), the devices defined in 40 CFR 72.2, and the SO2 monitors required by this paragraph (k) for determining compliance with the 30-Day Rolling Average SO2 Removal Efficiency requirement set forth in this paragraph (k).

(vii) “Continuous Operation,” “Continuously Operate,” and “Continuously Operating” mean that when a pollution control technology or combustion control is required to be used at a Unit pursuant to this paragraph (k) (including, but not limited to, SCR, FGD, or Baghouse), it shall be operated at all times such Unit is in operation, consistent with the technological limitations, manufacturers' specifications, good engineering and maintenance practices, and good air pollution control practices for minimizing emissions (as defined in 40 CFR 60.11(d)) for such equipment and the Unit.

(ix) “Emission Rate” means, for a given pollutant, the number of pounds of that pollutant emitted per million British thermal units of heat input (“lb/MMBtu”), measured in accordance with this paragraph (k).

(x) “Flue Gas Desulfurization System” and “FGD” mean a pollution control device that employs flue gas desulfurization technology, including an absorber utilizing lime slurry, for the reduction of SO2 emissions.

(xii) “lb/MMBtu” means one pound of a pollutant per million British thermal units of heat input.

(xiii) “Make-Right Vendor Guarantee” means, for an SCR, a guarantee offered by an SCR vendor that covers the SCR, including the catalyst, ammonia injection system, and support structure, under operating conditions (excluding any Malfunctions) above minimum operating temperature for the SCR, the achievement of which is demonstrated solely during two performance tests: One performance test no later than 90 Days after initial operation of the SCR, and one performance test after no fewer than 16,000 hours of SCR operation, but no later than December 31, 2020 regardless of the number of operating hours achieved. If the SCR does not meet the guarantee in one of these two performance tests, a Make-Right Vendor Guarantee requires the SCR vendor to repair, replace, or correct the SCR to meet the specified guaranteed Emission Rate, which is demonstrated by successful achievement of a performance test.

(xiv) “Malfunction” means any sudden, infrequent, and not reasonably preventable failure of air pollution control equipment, process equipment, or a process to operate in a normal or usual manner. Failures that are caused in part by poor maintenance or careless operation are not Malfunctions.

(xv) “NOX Allowance” means an authorization or credit to emit a specified amount of NOX that is allocated or issued under an emissions trading or marketable permit program of any kind established under the Clean Air Act or an applicable implementation plan. Although no NOX Allowance program is applicable to FCPP as of the promulgation of this paragraph (k), this definition of “NOX Allowance” includes authorizations or credits that may be allocated or issued under emissions trading or marketable permit programs that may become applicable to FCPP in the future.

(xvi) “Operating Day” means any Day on which a Unit fires Fossil Fuel.

(xvii) “PM” means total filterable particulate matter, measured in accordance with the provisions of this paragraph (k).

(xviii) “PM CEMS” and “PM Continuous Emission Monitoring System” mean, for obligations involving the monitoring of PM emissions under this paragraph (k), the equipment that samples, analyzes, measures, and provides, by readings taken at frequent intervals, an electronic and/or paper record of PM emissions.

(xix) “Removal Efficiency” means, for a given pollutant, the percentage of that pollutant removed by the applicable emission control device, measured in accordance with the provisions of this paragraph (k).

(xx) “Selective Catalytic Reduction” and “SCR” mean a pollution control device that destroys NOX by injecting a reducing agent (e.g., ammonia) into the flue gas that, in the presence of a catalyst (e.g., vanadium, titanium, or zeolite), converts NOX into molecular nitrogen and water.

(xxi) “Semi-annual reports” are periodic reports that are submitted to EPA within 60 days after the end of each half of the calendar year.

(xxii) “SO2 Allowance” means an authorization to emit a specified amount of SO2 that is allocated or issued under an emissions trading or marketable permit program of any kind established under the Clean Air Act or an applicable implementation plan, including as defined at 42 U.S.C. 7651a(3).

(xxiii) “Surrender” means to permanently surrender SO2 Allowances so that such SO2 Allowances can never be used to meet any compliance requirement under the Clean Air Act or this paragraph (k).

(xxiv) “Unit” means, solely for purposes of this paragraph (k), collectively, the coal pulverizer, stationary equipment that feeds coal to the boiler, the boiler that produces steam for the steam turbine, the steam turbine, the generator, equipment necessary to operate the generator, steam turbine and boiler, and all ancillary equipment, including pollution control equipment, at or serving a coal-fired steam electric generating unit at FCPP.

(xxv) “Wet Stack” means a stack designed to be capable of use with a saturated gas stream constructed with liner material(s) consisting of one or more of the following: Carbon steel with a protective lining (organic resin, fluoroelastomers, borosilicate glass blocks or a thin cladding of a corrosion-resistant alloy), fiberglass-reinforced plastic, solid corrosion-resistant alloy, or acid-resistant brick and mortar.

(2) NOXEmission Limitations and Control Requirements. (i) The owner or operator shall install and commence Continuous Operation of an SCR on or FCPP Unit 5 by no later than March 31, 2018. Commencing no later than 30 Operating Days thereafter, the owner or operator shall Continuously Operate the SCR so as to achieve and maintain a 30-Day Rolling Average NOX Emission Rate of no greater than 0.080 lb/MMBtu, subject to the petition process paragraph (k)(2)(iii).

(ii) The owner or operator shall install and commence Continuous Operation of an SCR on the FCPP Unit 4 by no later than July 31, 2018. Commencing no later than 30 Operating Days thereafter, the owner or operator shall Continuously Operate the SCR so as to achieve and maintain a 30-Day Rolling Average NOX Emission Rate of no greater than 0.080 lb/MMBtu, subject to the petition process in paragraph (k)(2)(iii).

(iii) At any time after March 31, 2019 but before December 31, 2020, the owner or operator may submit to EPA a petition for a proposed revision to the 30-Day Rolling Average NOX Emission Rate of 0.080 lb/MMBtu for either or both of the FCPP Units. The petition must demonstrate all of the following:

(A) That the design of the SCR system met the following parameters:

(1) The SCR system was designed to meet a NOX emission rate of 0.049 lb/MMBtu, on an hourly average basis, under normal operating conditions once the minimum operating temperature of the SCR catalyst is achieved; and

(2) The owner or operator obtained a Make-Right Vendor Guarantee for a NOX emission rate of 0.049 lb/MMBtu;

(B) That best efforts have been taken to achieve the 30-Day Rolling Average NOX Emission Rate of 0.080 lb/MMBtu. Best efforts include but are not limited to exhausting the Make-Right Vendor Guarantee and obtaining independent outside support from a registered professional engineer expert in SCR design. To demonstrate best efforts have been taken, the petition shall also include:

(1) The request for bid for the subject SCR;

(2) Winning bid documents, including all warranties and design information;

(3) NOX, NH3, and heat rate CEMS data and all related stack tests;

(4) Daily coal quality data, including sulfur, ash, and heat content;

(5) Operating and maintenance logs documenting all exceedances of the 0.080 lb/MMBtu 30-Day Rolling Average NOX Emission Rate and measures taken to correct them;

(6) Vendor certification pursuant to a Make-Right Vendor Guarantee that the 0.080 lb/MMBtu 30-Day Rolling Average NOX Emission Rate cannot be met by the SCR as designed;

(7) A signed and sealed report by a registered professional engineer expert in SCR design confirming the 0.080 lb/MMBtu 30-Day Rolling Average NOX Emission Rate cannot be met by the SCR as designed; and

(8) Affidavits documenting causes of failure to meet the 0.080 lb/MMBtu 30-Day Rolling Average NOX Emission Rate, signed and sealed by a licensed professional engineer;

(C) That the SCR system was properly operated and maintained pursuant to the manufacturer's specifications for achieving and Continuously Operating to meet the design NOX emission rate of 0.049 lb/MMBtu; and

(D) That the owner or operator Continuously Operated the SCR and maximized the percent of flue gas or water bypassed around the economizer during any startup and shutdown events in a manner to attain minimum operating temperature as quickly as reasonably possible during startup and to maintain minimum operating temperature during shutdowns as long as reasonably possible;

(E) That the owner or operator Continuously Operated the SCR and controlled the percent of flue gas or water bypassed around the economizer to maintain minimum operating temperature during load changes.

(iv) In any petition submitted pursuant to paragraph (k)(2)(iii), the owner or operator shall include an alternate 30-Day Rolling Average NOX Emission Rate, but in no event may the owner or operator propose a 30-Day Rolling Average NOX Emission Rate more than 0.085 lb/MMBtu. The owner or operator shall also submit all studies, reports, and/or recommendations from the vendor and contractor(s) required by this paragraph and paragraph (k)(2)(iii), evaluating each measure undertaken in an effort to meet a 30-Day Rolling Average NOX Emission Rate of no greater than 0.080 lb/MMBtu. The owner or operator shall also deliver with each submission all pertinent documents and data that support or were considered in preparing such submission, as well as all data pertaining to the performance of the SCR in question since August 17, 2015 and the operational history of the Unit since August 17, 2015.

(v) In addition to meeting the emissions rates set forth in paragraphs (k)(2)(i) and (k)(2)(ii), all Units at FCPP, collectively, shall not emit NOX in excess of the following Annual Tonnage Limitation: 31,060 tons of NOX per year in 2016 and 2017; 12,165 tons of NOX per year in 2018; and 4,968 tons of NOX per year in 2019 and thereafter. However, if the 30-Day Rolling Average NOX Emission Rate of 0.080 lb/MMBtu required under Paragraphs (k)(2)(i) and (k)(2)(ii) is revised pursuant to the petition process set forth in paragraphs (k)(2)(iii) and (k)(2)(iv), the annual NOX tonnage limitations set forth as follows shall increase by the ratio of the new NOX rate in lb/MMBtu determined pursuant to paragraphs (k)(2)(iii) and (k)(2)(iv) divided by 0.080 lb/MMBtu.

(vi) In determining the 30-Day Rolling Average NOX Emission Rate, the owner or operator shall use CEMS in accordance with the procedures of 40 CFR part 75, except that NOX emissions data for the 30-Day Rolling Average NOX Emission Rate need not be bias adjusted and the missing data substitution procedures of 40 CFR part 75 shall not apply. Diluent capping (i.e., 5 percent CO2) will be applied to the NOX emission calculation for any hours where the measured CO2 concentration is less than 5 percent following the procedures in 40 CFR part 75, Appendix F, Section 3.3.4.1. The owner or operator shall report semiannually all hours where diluent capping procedures were applied during the reporting period.

(vii) For purposes of determining compliance with the Annual Tonnage Limitations in paragraph (k)(2)(v), the owner or operator shall use CEMS in accordance with the procedures specified in 40 CFR part 75.

(viii) The owner or operator shall not sell, trade, or transfer any surplus NOX Allowances allocated to FCPP that would otherwise be available for sale or trade as a result of the actions taken by the owner or operator to comply with the requirements of this rule.

(3) SO2Emission Limitations and Control Requirements. (i) Beginning on August 17, 2015, the owner or operator shall continuously operate the existing FGDs at FCPP Unit 4 and Unit 5 so as to emit SO2 from FCPP at an amount no greater than 10.0 percent of the potential combustion concentration assuming all of the sulfur in the coal is converted to SO2. Compliance with this emissions standard shall be determined on a rolling 365-Operating Day basis using the applicable methodologies set forth in paragraph (e)(2) of this section. The first day for determining compliance with this emissions standard shall be 365 Days after August 17, 2015. The requirements of this paragraph shall remain in effect until the owner or operator achieve compliance with the requirements set forth in paragraphs (k)(3)(ii) and (k)(3)(iii).

(ii) By no later than March 31, 2018, the owner or operator shall convert the existing ductwork and stack at FCPP Unit 5 to a Wet Stack, so as to eliminate the need to bypass flue gas around the FGD absorbers for reheat purposes. Commencing no later than 30 Operating Days thereafter, the owner or operator shall continuously operate the existing FGD at FCPP Unit 5 so as to achieve and maintain a 30-Day Rolling Average SO2 Removal Efficiency of at least 95.0 percent.

(iii) By no later than July 31, 2018, the owner or operator shall convert the existing ductwork and stack at FCPP Unit 4 to a Wet Stack, so as to eliminate the need to bypass flue gas around the FGD absorbers for reheat purposes. Commencing no later than 30 Operating Days thereafter, the owner or operator shall Continuously Operate the existing FGD at FCPP Unit 4 so as to achieve and maintain a 30-Day Rolling Average SO2 Removal Efficiency of at least 95.0 percent.

(iv) In addition to meeting the emission rates set forth in paragraphs (k)(3)(i), (k)(3)(ii) and (k)(3)(iii), all Units at FCPP, collectively, shall not emit SO2 in excess of the following Annual Tonnage Limitations: 13,300 tons of SO2 per year in 2016 and 2017; 8,300 tons of SO2 per year in 2018; 6,800 tons of SO2 per year in 2019 and thereafter.

(v) By each of the dates by which the owner or operator must comply with the 30-Day Rolling Average SO2 Removal Efficiency required under paragraphs (k)(3)(ii) and (k)(3)(iii), the owner or operator shall install, certify, maintain, and operate FGD inlet SO2 and any associated diluent CEMS with respect to that Unit in accordance with the requirements of paragraph (e)(1) of this section.

(vi) In determining the 30-Day Rolling Average SO2 Removal Efficiency, the owner or operator shall use CEMS in accordance with the procedures of 40 CFR part 75, except that SO2 emissions data for the 30-Day Rolling Average SO2 Removal Efficiency need not be bias adjusted, and the missing data substitution procedures of 40 CFR part 75 shall not apply. Diluent capping (i.e., 5 percent CO2) will be applied to the SO2 emission calculation for any hours where the measured CO2 concentration is less than 5 percent following the procedures in 40 CFR part 75, Appendix F, Section 3.3.4.1. The owner or operator shall submit a semi-annual report that includes all hours where diluent capping procedures were applied during the reporting period.

(vii) For purposes of determining compliance with the Annual Tonnage Limitations in paragraph (k)(3)(iv), the owner or operator shall use CEMS in accordance with the procedures specified in 40 CFR part 75.

(4) Use and Surrender of SO2Allowances. (i) The owner or operator shall not use SO2 Allowances to comply with any requirement of paragraph (k), including by claiming compliance with any emission limitation required paragraph (k) by using, tendering, or otherwise applying SO2 Allowances to offset any excess emissions.

(ii) Except as provided in paragraph (k), the owner or operator shall not sell, bank, trade, or transfer any SO2 Allowances allocated to FCPP.

(iii) Beginning with calendar year 2015, and continuing each calendar year thereafter, the owner or operator shall surrender to EPA, or transfer to a non-profit third party selected by the owner or operator for Surrender, all SO2 Allowances allocated to FCPP for that calendar year that the owner or operator does not need in order to meet their own federal and/or state Clean Air Act statutory or regulatory requirements for the FCPP Units.

(iv) Nothing in paragraph (k)(4) shall prevent the owners or operator from purchasing or otherwise obtaining SO2 Allowances from another source for purposes of complying with Clean Air Act requirements to the extent otherwise allowed by law.

(v) For any given calendar year, provided that FCPP is in compliance for that calendar year with all emissions limitations for SO2 set forth in this section, nothing in paragraph (k), including the provisions of paragraphs (k)(4)(ii) and (k)(4)(iii) pertaining to the Use and Surrender of SO2 Allowances, shall preclude the owner or operator from selling, trading, or transferring SO2 Allowances allocated to FCPP that become available for sale or trade that calendar year solely as a result of:

(A) The installation and operation of any pollution control technology or technique at Unit 4 or Unit 5 that is not otherwise required by paragraph (k); or

(B) Achievement and maintenance of a 30-Day Rolling Average SO2 Removal Efficiency at Unit 4 or Unit 5 at a higher removal efficiency than the 30-Day Rolling Average SO2 Removal Efficiency required by paragraph (k)(3); so long as the owner or operator submits a semi-annual report of the generation of such surplus SO2 Allowances that occur after August 17, 2015.

(vi) The owner or operator shall Surrender, or transfer to a non-profit third party selected by the owner or operator for Surrender, all SO2 Allowances required to be Surrendered pursuant to paragraph (k)(4)(iii) by April 30 of the immediately following calendar year. Surrender need not include the specific SO2 Allowances that were allocated to FCPP, so long as the owner or operator Surrender SO2 Allowances that are from the same year and that are equal to the number required to be Surrendered under paragraph (k)(4)(vii).

(vii) If any SO2 Allowances are transferred directly to a non-profit third party, the owner or operator shall include a description of such transfer in the next semi-annual report submitted to EPA. Such report shall:

(A) Provide the identity of the non-profit third-party recipient(s) of the SO2Allowances and a listing of the serial numbers of the transferred SO2 Allowances; and

(B) Include a certification by the third-party recipient(s) certifying under the penalty of law that the recipient(s) will not sell, trade, or otherwise exchange any of the allowances and will not use any of the SO2 Allowances to meet any obligation imposed by any environmental law. The certification must also include a statement that the recipient understands that there are significant penalties for submitting false, inaccurate or incomplete information to the United States.

(C) No later than the third semi-annual report due after the transfer of any SO2 Allowances, the owner or operator shall include a statement that the third-party recipient(s) Surrendered the SO2 Allowances for permanent Surrender to EPA in accordance with the provisions of paragraph (k)(4)(ix) within one (1) year after the owner or operator transferred the SO2 Allowances to them. The owner or operator shall not have complied with the SO2 Allowance Surrender requirements of subparagraph (k)(4)(viii) until all third-party recipient(s) shall have actually Surrendered the transferred SO2 Allowances to EPA.

(viii) For all SO2 Allowances Surrendered to EPA, the owner or operator or the third-party recipient(s) (as the case may be) shall first submit an SO2 Allowance transfer request form to the EPA Office of Air and Radiation's Clean Air Markets Division directing the transfer of such SO2 Allowances to the EPA Enforcement Surrender Account or to any other EPA account that EPA may direct in writing. Such SO2 Allowance transfer requests may be made in an electronic manner using the EPA's Clean Air Markets Division Business System or similar system provided by EPA. As part of submitting these transfer requests, the owner or operator or the third-party recipient(s) shall irrevocably authorize the transfer of these SO2 Allowances and identify—by name of account and any applicable serial or other identification numbers or station names—the source and location of the SO2 Allowances being Surrendered.

(5) PM Emission Reduction Requirements.

(i) The owner or operator shall operate each FCPP Unit in a manner consistent with good air pollution control practice for minimizing PM emissions, as set forth in paragraph (g). In addition, with respect to FCPP Units 4 and 5, the owner or operator shall, at a minimum, to the extent practicable:

(A) Operate each compartment of the Baghouse for each Unit (except the compartment provided as a spare compartment under the design of the baghouse), regardless of whether those actions are needed to comply with opacity limits;

(C) Maintain and replace bags on each Baghouse as needed to achieve the required collection efficiency;

(D) Inspect for and repair during the next planned Unit outage (or unplanned outage of sufficient length) any openings in Baghouse casings, ductwork, and expansion joints to minimize air leakage; and

(E) Ensure that a bag leak detection program is developed and implemented to detect leaks and promptly repair any identified leaks.

(ii) The owner or operator shall Continuously Operate a Baghouse at FCPP Unit 4 and Unit 5 so as to achieve and maintain a filterable PM Emission Rate no greater than 0.0150 lb/MMBtu.

(iii) Once in each calendar year, the owner or operator shall conduct stack tests for PM at FCPP Units 4 and 5. Alternatively, following the installation and operation of PM CEMS as required by paragraph (k)(6), the owner or operator may seek written approval to forego stack testing and instead demonstrate continuous compliance with an applicable filterable PM Emission Rate using CEMS on a 24-hour rolling average basis.

(iv) Unless EPA approves a request to demonstrate continuous compliance using CEMS under paragraph (k)(5)(iii) to determine compliance with the PM Emission Rate established in subparagraph (k)(5)(ii), the owner or operator shall use the reference methods and procedures (filterable portion only) specified in 40 CFR part 60, App. A-3, Method 5, Method 5 as described in subpart UUUUU, Table 5, or App. A-6, Method 17 (provided that Method 17 shall only be used for stack tests conducted prior to conversion of an FCPP Unit to a Wet Stack), or alternative stack tests or methods that are requested by the owner or operator and approved by EPA. Each test shall consist of three separate runs performed under representative operating conditions not including periods of startup, shutdown, or Malfunction. The sampling time for each run shall be at least 120 minutes and the volume of each run shall be at least 1.70 dry standard cubic meters (60 dry standard cubic feet). The owner or operator shall calculate the PM Emission Rate from the stack test results in accordance with 40 CFR 60.8(f). The results of each PM stack test shall be submitted to EPA and NNEPA within 60 Days of completion of each test.

(v) Once each calendar year, the owner or operator shall conduct a PM stack test for condensable PM at FCPP Units 4 and 5, using the reference methods and procedures set forth at 40 CFR part 51, Appendix M, Method 202 and as set forth in paragraph (vi). This test shall be conducted under as similar operating conditions and as close in time as reasonably possible as the test for filterable PM in paragraph (k)(5)(iv). Each test shall consist of three separate runs performed under representative operating conditions not including periods of startup, shutdown, or Malfunction. The sampling time for each run shall be at least 120 minutes and the volume of each run shall be at least 1.70 dry standard cubic meters (60 dry standard cubic feet). The owner or operator shall calculate the number of pounds of condensable PM emitted in lb/MMBtu of heat input from the stack test results in accordance with 40 CFR 60.8(f). The results of the PM stack test conducted pursuant to this paragraph shall not be used for the purpose of determining compliance with the PM Emission Rates required by paragraph (k). The results of each PM stack test shall be submitted to EPA within sixty (60) Days of completion of each test. If EPA approves a request to demonstrate continuous compliance with an applicable PM Emission Rate at a Unit using PM CEMS under paragraph (k)(5)(iii), annual stack testing for condensable PM using the reference methods and procedures set forth at 40 CFR part 51, Appendix M, Method 202 is not required for that Unit.

(6) PM CEMS. (i) The owner or operator shall install, correlate, maintain, and operate a PM CEMS for FCPP Unit 4 and FCPP Unit 5 as specified below. The PM CEMS shall comprise a continuous-particle mass monitor measuring particulate matter concentration, directly or indirectly, on an hourly average basis and a diluent monitor used to convert the concentration to units expressed in lb/MMBtu. The PM CEMS installed at each Unit must be appropriate for the anticipated stack conditions and capable of measuring PM concentrations on an hourly average basis. Each PM CEMS shall complete a minimum of one cycle of operations (sampling, analyzing and data recording) for each successive 15-minute period. The owner or operator shall maintain, in an electronic database, the hourly-average emission values of all PM CEMS in lb/MMBtu. Except for periods of monitor malfunction, maintenance, or repair, the owner or operator shall continuously operate the PM CEMS at all times when the Unit it serves is operating.

(ii) By no later than February 16, 2017, the owner or operator shall ensure that the PM CEMS are installed, correlated, maintained and operated at FCPP Units 4 and 5.

(iii) The owner or operator shall ensure that performance specification tests on the PM CEMS are conducted and shall ensure compliance with the PM CEMS installation plan and QA/QC protocol submitted to and approved by EPA. The PM CEMS shall be operated in accordance with the approved plan and QA/QC protocol.

(iv) The data recorded by the PM CEMS during Unit operation, expressed in lb/MMBtu on a 3-hour, 24-hour, and 30-Day rolling average basis, shall be included in the semiannual report submitted to EPA in electronic format (Microsoft Excel-compatible).

(v) Notwithstanding any other provision of paragraph (k), exceedances of the PM Emission Rate that occur as a result of detuning emission controls as required to achieve the high-level PM test runs during the correlation testing shall not be considered a violation of the requirements of this section provided that the owner or operator made best efforts to keep the high-level PM test runs during such correlation testing below the applicable PM Emission Rate.

(vi) Stack testing conducted pursuant to paragraph (k)(5)(iv) shall be the compliance method for the PM Emission Rates established by paragraph (k)(5), unless EPA approves a request under paragraph (k)(5)(iii), in which case PM CEMS shall be used to demonstrate continuous compliance with an applicable PM Emission Rate on a 24-hour rolling average basis. Data from PM CEMS shall be used, at a minimum, to monitor progress in reducing PM emissions on a continuous basis.

(7) Reporting. The owner or operator shall submit all notifications, petitions, and reports under paragraph (k), unless otherwise specified, to EPA and NNEPA in accordance with paragraph (f).

In this action, the Environmental Protection Agency (EPA) proposes editorial and technical revisions to the EPA's Method 301 “Field Validation of Pollutant Measurement Methods from Various Waste Media” in order to correct and update the method. In addition, the EPA is clarifying the applicability of Method 301 as well as its utility to other regulatory provisions. The proposed revisions include ruggedness testing for validation of test methods for application at multiple sources, determination of limit of detection for all method validations, incorporating procedures for determining the limit of detection, revising the sampling requirements for the comparison procedure, adding storage and sampling procedures for sorbent sampling systems, and clarifying acceptable statistical results for candidate test methods. We also propose to clarify the applicability of Method 301 to our regulations and to add equations to clarify calculation of the correction factor, standard deviation, estimated variance of a validated test method, standard deviation of differences, and t-statistic for all validation approaches.

Changes made to the Method 301 field validation protocol under this proposed action would apply only to methods submitted to the EPA for approval after the effective date of this action.

DATES:

Comments. Comments must be received on or before January 31, 2017.

Public Hearing. If anyone contacts the EPA requesting a public hearing by December 12, 2016, the EPA will hold a public hearing on January 3, 2017 from 1:00 p.m. (Eastern Standard Time) to 5:00 p.m. (Eastern Standard Time) at the U.S. Environmental Protection Agency building located at 109 T.W. Alexander Drive, Research Triangle Park, NC 27711. Information regarding a hearing will be posted at http://www3.epa.gov/ttn/emc/methods/.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2016-0069, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or withdrawn. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.

Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the Web, Cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

SUPPLEMENTARY INFORMATION:Table of ContentsI. General InformationA. Does this action apply to me?B. What should I consider as I prepare my comments?C. Where can I get a copy of this document and other related information?II. BackgroundIII. Summary of Proposed RevisionsA. Technical RevisionsB. Clarifying and Editorial ChangesIV. Request for CommentsV. Statutory and Executive Order ReviewsA. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory ReviewB. Paperwork Reduction Act (PRA)C. Regulatory Flexibility Act (RFA)D. Unfunded Mandates Reform Act (UMRA)E. Executive Order 13132: FederalismF. Executive Order 13175: Consultation and Coordination With Indian Tribal GovernmentsG. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety RisksH. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or UseI. National Technology Transfer and Advancement Act (NTTAA)J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income PopulationsI. General InformationA. Does this action apply to me?

Method 301 affects/applies to you, under 40 CFR 63.7(f) or 40 CFR 65.158(a)(2)(iii), when you want to use an alternative to a required test method to meet an applicable requirement or when there is no required or validated test method. In addition, the validation procedures of Method 301 are an appropriate tool for demonstration of the suitability of alternative test methods under 40 CFR 59.104 and 59.406, 40 CFR 60.8(b), and 40 CFR 61.13(h)(1)(ii). If you have any questions regarding the applicability of the proposed changes to Method 301, contact the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. What should I consider as I prepare my comments?

Submitting CBI: Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to the EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information marked as CBI will not be disclosed except in accordance with procedures set forth in title 40 CFRpart 2.

Do not submit information that you consider to be CBI or otherwise protected through http://www.regulations.gov or email. Send or deliver information identified as CBI to: OAQPS Document Control Officer (Room C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. EPA-HQ-OAR-2016-0069.

If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the FOR FURTHER INFORMATION CONTACT section.

Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in http://www.regulations.gov or in hard copy at the EPA Docket Center, EPA/DC, EPA WJC West Building, Room 3334, 1301 Constitution Ave. NW., Washington, DC. This Docket Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

C. Where can I get a copy of this document and other related information?

In addition to being available in the docket, an electronic copy of the proposed method revisions is available on the Technology Transfer Network (TTN) Web site at http://www3.epa.gov/ttn/emc/methods/. The TTN provides information and technology exchange in various areas of air pollution control.

II. Background

The EPA originally published Method 301 (appendix A to 40 CFR part 63, Test Methods) on December 29, 1992 (57 FR 61970), as a field validation protocol method to be used to validate new test methods for hazardous air pollutants in support of the Early Reductions Program of Part 63 when test methods were unavailable. On March 16, 1994, the EPA incorporated Method 301 into 40 CFR 63.7 (59 FR 12430) as a means to validate a candidate test method as an alternative to a test method specified in a standard or for use where no test method is provided in a standard. To date, subsequent revisions of Method 301 have not distinguished requirements for source-specific applications of a candidate method versus application of a candidate test method at multiple sources. The EPA's Method 301 specifies procedures for determining and documenting the bias and precision of a test method that is a candidate for use as an alternative to a test method specified in an applicable regulation, or for use as a means for showing compliance with a regulatory standard in absence of a validated test method. Method 301 is required for these purposes under 40 CFR 63.7(f) and 40 CFR 65.158(a)(2)(iii), and would be considered an appropriate tool for demonstration and validation of alternative methods under 40 CFR 59.104 and 59.406, 40 CFR 60.8(b), and 40 CFR 61.13(h)(1)(ii). The procedures specified in Method 301 are applicable to various media types (e.g., sludge, exhaust gas, wastewater).

Bias (or systemic error) is established by comparing measurements made using a candidate test method against reference values, either reference materials or a validated test method. Where needed, a correction factor for source-specific application of the method is employed to eliminate/minimize bias. This correction factor is established from data obtained during the validation test. Methods that have bias correction factors outside a specified range are considered unacceptable. Method precision (or random error) must be demonstrated to be as precise as the validated method for acceptance or less than or equal to 20 percent when the candidate method is being evaluated using reference materials.

Additionally, the EPA recognized that there were a number of ways Method 301 could be clarified while reviewing submitted data and answering questions from facilities, environmental labs, and technology vendors on the application and requirements of the method.

III. Summary of Proposed Revisions

In this action, we propose clarifications to the applicability and utility of Method 301 to additional regulatory provisions, and propose technical revisions and editorial changes intended to clarify and update the requirements and procedures specified in Method 301.

In the current version of Method 301, the procedures for conducting ruggedness testing in sections 3.1 and 14.0, and for determining the limit of detection (LOD) in sections 3.1 and 15.0, are optional procedures that are not required for validation of a candidate test method. In this action, we propose to amend sections 3.1 and 14.0 to require ruggedness testing when using Method 301 to validate a candidate test method intended for application to multiple sources. Ruggedness testing would continue to be optional for validation of methods intended for source-specific applications. We also propose to amend sections 3.1 and 15.0 to require determination of the LOD for validation of all methods (i.e., those intended for both source and multi-source application). Additionally, we propose clarifications to the LOD definition in section 15.1.

Ruggedness testing of a test method is a laboratory study to determine the sensitivity of the method by measuring its capacity to remain unaffected by small, but deliberate variations in method parameters such as sample collection rate and sample recovery temperature to provide an indication of its reliability during normal usage. Requiring ruggedness testing and determination of the LOD for validation of a candidate test method that is intended for use at multiple sources will further inform the EPA's determination of whether the candidate test method is valid across a range of source emission matrices, varying method parameters, and conditions. Additionally, conducting an LOD determination for source-specific validations will account for the sensitivity of the candidate test method to ensure it meets applicable regulatory requirements.

2. Limit of Detection Procedures

The EPA proposes revisions to the requirements for determining the LOD specified in section 15.2 and Table 301-5 (Procedure I) to incorporate procedures of the EPA's proposed revisions to 40 CFR part 136, appendix B (80 FR 8955). The proposed revisions address laboratory blank contamination and account for intra-laboratory variability, consistent with the proposed changes to 40 CFR part 136. We propose to require Procedure I of Table 301-5 for determining an LOD when an analyte in a sample matrix is collected prior to an analytical measurement or the estimated LOD is no more than twice the calculated LOD.

For the purposes of this proposed rule, LOD would be equivalent to the calculated method detection limit (MDL) determined using the procedures specified in proposed 40 CFR part 136, appendix B. Through this proposed change, laboratories would be required to consider media blanks when performing LOD calculations. If the revisions to 40 CFR part 136, appendix B are finalized as proposed prior to a final action on this proposal, we will cross-reference appendix B. If appendix B is finalized before this action and the revisions do not incorporate the procedures as described above, the EPA intends to incorporate the specific procedures for determining the LOD in the final version of Method 301 consistent with this proposal. If appendix B is not finalized before these proposed revisions, the EPA also intends to incorporate the specific procedures directly into Method 301. Other than the proposed revisions to 40 CFR part 136, appendix B, as discussed above, changes addressed under that rulemaking are outside the scope of this proposed action.

3. Storage and Sampling Procedures

Currently, the number of samples required by Method 301 when using a quadruplicate sampling system for conducting the analyte spiking procedure and for conducting the comparison procedure is not consistent. In this action, we propose revisions to section 11.1.3 and Table 301-1 to require six sets of quadruplicate samples (a total of 24 samples for the analyte spiking or comparison procedures) rather than four sets. This proposed revision will ensure the bias and precision requirements are consistent in the method and decrease the amount of uncertainty in the calculations for bias and precision when comparing an alternative test method with a validated method. Bias and precision (standard deviation and variance) are all inversely related to the number of sampling trains (sample results) used to estimate the difference between the alternative test method and the validated method. As the number of trains goes up, the bias and precision estimates go down. Larger data sets provide better estimates of the standard deviation or variance and the distribution of the data. The proposed revision to collect a total of 24 samples when using the analyte spiking approach is also consistent with the number of samples required for the isotopic spiking approach. The 12 samples collected when conducting the isotopic spiking approach are equivalent to the 24 samples collected using the analyte spiking approach because the isotopic labelling of the spike allows each of the 12 samples to yield two results, one for an unspiked sample and one for a spiked sample.

In this action, we also propose revisions to section 9.0 to specify that either paired sampling or quadruplicate sampling systems may be used for isotopic spiking, while only quadruplicate sampling systems may be used to establish precision for analyte spiking or when comparing an alternative method to a validated method.

For validations conducted by comparing the candidate test method to a validated test method, we propose to add: (1) Storage and sampling procedures for sorbent systems requiring thermal desorption to Table 301-2; and (2) a new Table 301-4 to provide a look-up table of F values for the one-sided confidence level used in assessing the precision of the candidate test method. We also propose an amendment to the reference list in section 18.0 to include the source of the F values.

4. Bias Criteria for Multi-Source Versus Source-Specific Validation

In this action, we propose clarification to sections 8.0, 10.3, and 11.1.3 to specify that candidate test methods intended for use at multiple sources must have a bias less than or equal to 10 percent. We propose that candidate test methods with a bias greater than 10 percent, but less than 30 percent, apply only at the source at which the validation testing was conducted and that data collected in the future be adjusted for bias using a source-specific correction factor. A source-specific correction factor is not necessarily appropriate for use at multiple sources. This proposed change provides flexibility for source-specific Method 301 application while limiting the acceptance criteria for use of the method at multiple sources. We believe that the Method 301 results from a single source are not sufficient to allow us to establish a correction factor that can be applied at multiple sources.

5. Relative Standard Deviation Assessment

In this action, we propose amendments to sections 9.0 and 12.2 to clarify the interpretation of the relative standard deviation (RSD) when determining the precision of a candidate test method using the analyte spiking or isotopic spiking procedures. For a test method to be acceptable, we propose that the RSD of a candidate test method must be less than or equal to 20 percent. Accordingly, we propose to remove the sampling provisions for cases where the RSD is greater than 20 percent, but less than 50 percent. Poor precision makes it difficult to detect potential bias in a test method. For this reason, we are proposing an acceptance criteria of less than or equal to 20 percent for analyte and isotopic spiking sampling procedures.

6. Applicability of Method 301

Currently, Method 301 states that it is applicable for determining alternative test methods for standards under 40 CFR part 63 (National Emission Standards for Hazardous Air Pollutants for Source Categories). Although 40 CFR 65.158(a)(2)(iii) specifically cross-references Method 301, Method 301 has not previously been revised to reference Part 65. For parts 63 and 65, Method 301 must be used for establishing an alternative test method. In this action, we propose revisions clarifying that Method 301 is applicable to both parts 63 and 65 and that Method 301 is also appropriate for validating alternative test methods for use under the following parts under title 40 of the Clean Air Act:

• Part 59 (National Volatile Organic Compound Emission Standards for Consumer and Commercial Products)• Part 60 (Standards of Performance for New Stationary Sources)• Part 61 (National Emission Standards for Hazardous Air Pollutants)

We believe that the Method 301 procedures for determining bias and precision provide a suitable technical approach for assessing candidate or alternative test methods for use under these regulatory parts as the testing provisions are very similar to those under parts 63 and 65. To accommodate the expanded applicability and suitability, we propose to revise the references in sections 2.0, 3.2, 5.0, 13.0, 14.0, and 16.1 to refer to all five regulatory parts.

7. Equation Additions

In this action, we propose to clarify the procedures in Method 301 by adding the following equations:

• Equation 301-8 in section 10.3 for calculating the correction factor• Equation 301-11 in section 11.1.1 and Equation 301-19 in section 12.1.1 for calculating the numerical bias• Equation 301-12 in section 11.1.2 and Equation 301-20 in section 12.1.2 for determining the standard deviation of differences• Equation 301-13 in section 11.1.3 and Equation 301-21 in section 12.1.3 for calculating the t-statistic• Equation 301-15 in section 11.2.1 to estimate the variance of the validated test method• Equation 301-23 in section 12.2 for calculating the standard deviation

We also propose revisions to the denominator of Equation 22 to use the variable “CS” rather than “VS.” Additionally, we propose revisions to the text of Method 301, where needed, to list and define all variables used in the method equations. These proposed changes are intended to improve the readability of the method and ensure that required calculations and acceptance criteria for each of Method 301's three validation approaches are clear.

B. Clarifying and Editorial Changes

In this action, we propose minor edits throughout the text of Method 301 to clarify the descriptions and requirements for assessing bias and precision, to ensure consistency when referring to citations within the method, to renumber equations and tables (where necessary), and to remove passive voice.

We propose edits to clarify several definitions in section 3.2. In the definition of “Paired sampling system,” we propose a minor edit to note that the system is collocated. For the definition of “Quadruplet sampling system,” we propose to replace the term “Quadruplet” with “Quadruplicate” and to add descriptive text to the definition to provide examples of replicate samples. We are also proposing companion edits throughout the method text to reflect the change in terminology from “quadruplet” to “quadruplicate.” Additionally, we propose clarifying edits to the definition of “surrogate compound.”

We also propose replacing the term “alternative test method” with “candidate test method” in section 3.2 and throughout Method 301 to maintain consistency when referring to a test method that is subject to the validation procedures specified in Method 301.

Additionally, the EPA proposes the following updates and corrections by:

• Updating the address for submitting waivers in section 17.2.

• Adding the t-value for 11 degrees of freedom to Table 301-2.

• Correcting the t-value for four degrees of freedom in Table 301-2.

IV. Request for Comments

The EPA specifically requests public comments on the expanded applicability of Method 301 to 40 CFR part 59 and to note the suitability of Method 301 for validation of alternative test methods under 40 CFR parts 60 and 61. In addition, we specifically request comment on the following proposed technical amendments to Method 301:

(A) Requiring ruggedness testing and determination of LOD for validation of test methods intended for multi-source and source-specific applications.

(B) Incorporating the procedures specified in the proposed revisions to 40 CFR part 136, appendix B, into the Method 301 procedures for determining LOD.

(C) Revising the sampling requirements for the method comparison procedure to require six sets of quadruplicate samples rather than four sets, and adding storage and sampling procedures for sorbent systems that require thermal desorption.

(D) Clarifying that candidate test methods that are intended for use at multiple sources must have a bias less than or equal to 10 percent and that test methods, where the bias is greater than 10 percent but less than to 30 percent, are applicable only on a source-specific basis with the use of a correction factor.

(E) Clarifying that the RSD of a candidate test method validated using the analyte spiking or isotopic spiking procedure must be less than or equal to 20 percent for the method to be acceptable.

(F) Adding equations to calculate the: (1) Correction factor (if required) when using isotopic spiking; (2) standard deviation when using the analyte spiking procedure; (3) estimated variance of validated test method when using the comparison procedure; and (4) standard deviation of differences and t-statistic when using the analyte spiking or comparison procedures.

V. Statutory and Executive Order ReviewsA. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

This proposed action is not a significant regulatory action and was, therefore, not submitted to the Office of Management and Budget (OMB) for review.

B. Paperwork Reduction Act (PRA)

This proposed action does not impose an information collection burden under the PRA. The revisions being proposed in this action to Method 301 do not add information collection requirements, but make corrections and updates to existing testing methodology.

C. Regulatory Flexibility Act (RFA)

I certify that this proposed action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. The proposed revisions to Method 301 do not impose any requirements on regulated entities beyond those specified in the current regulations, nor do they change any emission standard. We have therefore concluded that this proposed action will have no net regulatory burden for all directly regulated small entities.

D. Unfunded Mandates Reform Act (UMRA)

This proposed action does not contain any unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538. The proposed action imposes no enforceable duty on any state, local or tribal governments or the private sector.

E. Executive Order 13132: Federalism

This proposed action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This proposed action does not have tribal implications, as specified in Executive Order 13175. This proposed action would correct and update the existing procedures specified in Method 301. Thus, Executive Order 13175 does not apply to this proposed action.

G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This proposed action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk.

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use

This proposed action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act (NTTAA)

This proposed action involves technical standards. The agency previously identified ASTM D4855-97 (Standard Practice for Comparing Test Methods) as being potentially applicable in previous revisions of Method 301, but determined that the use of ASTM D4855-97 was impractical (Section V in 76 FR 28664).

The EPA believes that this action is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not establish an environmental health or safety standard. This action would make corrections and updates to an existing protocol for assessing the precision and accuracy of alternative test methods to ensure they are comparable to the methods otherwise required; thus, it does not modify or affect the impacts to human health or the environment of any standards for which it may be used.

For the reasons stated in the preamble, the EPA proposes to amend title 40, chapter I of the Code of the Federal Regulations as follows:

PART 63—[AMENDED]1. The authority citation for part 63 continues to read as follows:Authority:

42 U.S.C. 7401 et seq.

2. Appendix A to part 63 is amended by revising Method 301 to read as follows:Appendix A to Part 63—Test Methods Pollutant Measurement Methods From Various Waste MediaMethod 301—Field Validation of Pollutant Measurement Methods From Various Waste MediaSec.Using Method 3011.0 What is the purpose of Method 301?2.0 When must I use Method 301?3.0 What does Method 301 include?4.0 How do I perform Method 301?Reference Materials5.0 What reference materials must I use?Sampling Procedures6.0 What sampling procedures must I use?7.0 How do I ensure sample stability?Bias and Precision8.0 What are the requirements for bias?9.0 What are the requirements for precision?10.0 What calculations must I perform for isotopic spiking?11.0 What calculations must I perform for comparison with a validated method if I am using quadruplicate replicate sampling systems?12.0 What calculations must I perform for analyte spiking?13.0 How do I conduct tests at similar sources?Optional Requirements14.0 How do I use and conduct ruggedness testing?15.0 How do I determine the Limit of Detection for the candidate test method?Other Requirements and Information16.0 How do I apply for approval to use a candidate test method?17.0 How do I request a waiver?18.0 Where can I find additional information?Using Method 3011.0 What is the purpose of Method 301?

Method 301 provides a set of procedures for the owner or operator of an affected source, to validate a candidate test method as an alternative to a required test method based on established precision and bias criteria. These validation procedures are applicable under 40 CFR part 63 or 65 when a test method is proposed as an alternative test method to meet an applicable requirement or in the absence of a validated method. Additionally, the validation procedures of Method 301 are appropriate for demonstration of the suitability of alternative test methods under 40 CFR parts 59, 60, and 61. If, under 40 CFR part 63 or 60, you choose to propose a validation method other than Method 301, you must submit and obtain the Administrator's approval for the candidate validation method.

2.0 What approval must I have to use Method 301?

If you want to use a candidate test method to meet requirements in a subpart of 40 CFR part 59, 60, 61, 63, or 65, you must also request approval to use the candidate test method according to the procedures in Section 16 of this method and the appropriate section of the part (§ 59.104, § 59.406, § 60.8(b), § 61.13(h)(ii), § 63.7(f), or § 65.158(a)(2)(iii)). You must receive the Administrator's written approval to use the candidate test method before you use the candidate test method to meet the applicable federal requirements. In some cases, the Administrator may decide to waive the requirement to use Method 301 for a candidate test method to be used to meet a requirement under 40 CFR part 59, 60, 61, 63, or 65 in absence of a validated test method. Section 17 of this method describes the requirements for obtaining a waiver.

3.0 What does Method 301 include?

3.1 Procedures. Method 301 includes minimum procedures to determine and document systematic error (bias) and random error (precision) of measured concentrations from exhaust gases, wastewater, sludge, and other media. Bias is established by comparing the results of sampling and analysis against a reference value. Bias may be adjusted on a source-specific basis using a correction factor and data obtained during the validation test. Precision may be determined using a paired sampling system or quadruplicate sampling system for isotopic spiking. A quadruplicate sampling system is required when establishing precision for analyte spiking or when comparing a candidate test method to a validated method. If such procedures have not been established and verified for the candidate test method, Method 301 contains procedures for ensuring sample stability by developing sample storage procedures and limitations and then testing them. Method 301 also includes procedures for ruggedness testing and determining detection limits. The procedures for ruggedness testing and determining detection limits are required for candidate test methods that are to be applied to multiple sources and optional for candidate test methods that are to be applied at a single source.

3.2 Definitions.

Affected source means an affected source as defined in the relevant part and subpart under title 40 (e.g., 40 CFR parts 59, 60, 61, 63, and 65).

Candidate test method means the sampling and analytical methodology selected for field validation using the procedures described in Method 301. The candidate test method may be an alternative test method under 40 CFR part 59, 60, 61, 63, or 65.

Paired sampling system means a sampling system capable of obtaining two replicate samples that are collected as closely as possible in sampling time and sampling location (collocated).

Quadruplicate sampling system means a sampling system capable of obtaining four replicate samples (e.g., two pairs of measured data, one pair from each method when comparing a candidate test method against a validated test method, or analyte spiking with two spiked and two unspiked samples) that are collected as close as possible in sampling time and sampling location.

Surrogate compound means a compound that serves as a model for the target compound(s) being measured (i.e., similar chemical structure, properties, behavior). The surrogate compound can be distinguished by the candidate test method from the compounds being analyzed.

4.0 How do I perform Method 301?

First, you use a known concentration of an analyte or compare the candidate test method against a validated test method to determine the bias of the candidate test method. Then, you collect multiple, collocated simultaneous samples to determine the precision of the candidate test method. Additional procedures, including validation testing over a broad range of concentrations over an extended time period are used to expand the applicability of a candidate test method to multiple sources. Sections 5.0 through 17.0 of this method describe the procedures in detail.

Reference Materials5.0 What reference materials must I use?

You must use reference materials (a material or substance with one or more properties that are sufficiently homogenous to the analyte) that are traceable to a national standards body (e.g., National Institute of Standards and Technology (NIST)) at the level of the applicable emission limitation or standard that the subpart in 40 CFR part 59, 60, 61, 63, or 65 requires. If you want to expand the applicable range of the candidate test method, you must conduct additional test runs using analyte concentrations higher and lower than the applicable emission limitation or the anticipated level of the target analyte. You must obtain information about your analyte according to the procedures in Sections 5.1 through 5.4 of this method.

5.1 Exhaust Gas Test Concentration. You must obtain a known concentration of each analyte from an independent source such as a specialty gas manufacturer, specialty chemical company, or chemical laboratory. You must also obtain the manufacturer's certification of traceability, uncertainty, and stability for the analyte concentration.

5.2 Tests for Other Waste Media. You must obtain the pure liquid components of each analyte from an independent manufacturer. The manufacturer must certify the purity, traceability, uncertainty, and shelf life of the pure liquid components. You must dilute the pure liquid components in the same type medium or matrix as the waste from the affected source.

5.3 Surrogate Analytes. If you demonstrate to the Administrator's satisfaction that a surrogate compound behaves as the analyte does, then you may use surrogate compounds for highly toxic or reactive compounds. A surrogate may be an isotope or compound that contains a unique element (e.g., chlorine) that is not present in the source or a derivation of the toxic or reactive compound if the derivative formation is part of the method's procedure. You may use laboratory experiments or literature data to show behavioral acceptability.

5.4 Isotopically-Labeled Materials. Isotope mixtures may contain the isotope and the natural analyte. The concentration of the isotopically-labeled analyte must be more than five times the concentration of the naturally-occurring analyte.

Sampling Procedures6.0 What sampling procedures must I use?

You must determine bias and precision by comparison against a validated test method, using isotopic spiking, or using analyte spiking (or the equivalent). Isotopic spiking can only be used with candidate test methods capable of measuring multiple isotopes simultaneously such as test methods using mass spectrometry or radiological procedures. You must collect samples according to the requirements specified in Table 301-1 of this method. You must perform the sampling according to the procedures in Sections 6.1 through 6.4 of this method.

6.1 Isotopic Spiking. Spike all 12 samples with isotopically-labelled analyte at an analyte mass or concentration level equivalent to the emission limitation or standard specified in the applicable regulation. If there is no applicable emission limitation or standard, spike the analyte at the expected level of the samples. Follow the applicable spiking procedures in Section 6.3 of this method.

6.2 Analyte Spiking. In each quadruplicate set, spike half of the samples (two out of the four samples) with the analyte according to the applicable procedure in Section 6.3 of this method. You should spike at an analyte mass or concentration level equivalent to the emission limitation or standard specified in the applicable regulation. If there is no applicable emission limitation or standard, spike the analyte at the expected level of the samples. Follow the applicable spiking procedures in Section 6.3 of this method.

6.3 Spiking Procedure.

6.3.1 Gaseous Analyte With Sorbent or Impinger Sampling Train. Sample the analyte being spiked (in the laboratory or preferably in the field) at a mass or concentration that is approximately equivalent to the applicable emission limitation or standard (or the expected sample concentration or mass where there is no standard) for the time required by the candidate test method, and then sample the stack gas stream for an equal amount of time. The time for sampling both the analyte and stack gas stream should be equal; however, you must adjust the sampling time to avoid sorbent breakthrough. You may sample the stack gas and the gaseous analyte at the same time. You must introduce the analyte as close to the tip of the sampling probe as possible.

6.3.2 Gaseous Analyte With Sample Container (Bag or Canister). Spike the sample containers after completion of each test run with an analyte mass or concentration to yield a concentration approximately equivalent to the applicable emission limitation or standard (or the expected sample concentration or mass where there is no standard). Thus, the final concentration of the analyte in the sample container would be approximately equal to the analyte concentration in the stack gas plus the equivalent of the applicable emission standard (corrected for spike volume). The volume amount of spiked gas must be less than 10 percent of the sample volume of the container.

6.3.3 Liquid or Solid Analyte With Sorbent or Impinger Trains. Spike the sampling trains with an amount approximately equivalent to the mass or concentration in the applicable emission limitation or standard (or the expected sample concentration or mass where there is no standard) before sampling the stack gas. If possible, do the spiking in the field. If it is not possible to do the spiking in the field, you must spike the sampling trains in the laboratory.

6.3.4 Liquid and Solid Analyte With Sample Container (Bag or Canister). Spike the containers at the completion of each test run with an analyte mass or concentration approximately equivalent to the applicable emission limitation or standard in the subpart (or the expected sample concentration or mass where there is no standard).

6.4 Probe Placement and Arrangement for Stationary Source Stack or Duct Sampling. To sample a stationary source, you must place the paired or quadruplicate probes according to the procedures in this subsection. You must place the probe tips in the same horizontal plane.

6.4.1 Paired Sampling Probes. For paired sampling probes, the first probe tip should be 2.5 centimeters (cm) from the outside edge of the second probe tip, with a pitot tube on the outside of each probe. Section 17.1 of Method 301 describes conditions for waivers. For example, the Administrator may approve a validation request where other paired arrangements for the pitot tubes (where required) are used.

6.4.2 Quadruplicate Sampling Probes. For quadruplicate sampling probes, the tips should be in a 6.0 cm x 6.0 cm square area measured from the center line of the opening of the probe tip with a single pitot tube, where required, in the center of the probe tips or two pitot tubes, where required, with their location on either side of the probe tip configuration. Section 17.1 of Method 301 describes conditions for waivers. For example, you must propose an alternative arrangement whenever the cross-sectional area of the probe tip configuration is approximately five percent or more of the stack or duct cross-sectional area.

7.0 How do I ensure sample stability?

7.1 Developing Sample Storage and Threshold Procedures. If the candidate test method includes well-established procedures supported by experimental data for sample storage and the time within which the collected samples must be analyzed, you must store the samples according to the procedures in the candidate test method and you are not required to conduct the procedures specified in Section 7.2 or 7.3 of this method. If the candidate test method does not include such procedures, your candidate method must include procedures for storing and analyzing samples to ensure sample stability. At a minimum, your proposed procedures must meet the requirements in Section 7.2 or 7.3 of this method. The minimum time period between collection and storage must be as soon as possible, but no longer than 72 hours after collection of the sample. The maximum storage duration must not be longer than 2 weeks.

7.2 Storage and Sampling Procedures for Stack Test Emissions. You must store and analyze samples of stack test emissions according to Table 301-2 of this method. You may reanalyze the same sample at both the minimum and maximum storage durations for: (1) Samples collected in containers such as bags or canisters that are not subject to dilution or other preparation steps, or (2) impinger samples not subjected to preparation steps that would affect stability of the sample such as extraction or digestion. For candidate test method samples that do not meet either of these criteria, you must analyze one of a pair of replicate samples at the minimum storage duration and the other replicate at the proposed storage duration but no later than 2 weeks of the initial analysis to identify the effect of storage duration on analyte samples. If you are using the isotopic spiking procedure, then you must analyze each sample for the spiked analyte and the native analyte.

7.3 Storage and Sampling Procedures for Testing Other Waste Media (e.g., Soil/Sediment, Solid Waste, Water/Liquid). You must analyze one of each pair of replicate samples (half the total samples) at the minimum storage duration and the other replicate (other half of samples) at the maximum storage duration or within two weeks of the initial analysis to identify the effect of storage duration on analyte samples. The minimum time period between collection and storage should be as soon as possible, but no longer than 72 hours after collection of the sample.

7.4 Sample Stability. After you have conducted sampling and analysis according to Section 7.2 or 7.3 of this method, compare the results at the minimum and maximum storage durations. Calculate the difference in the results using Equation 301-1 of this method.

EP02DE16.000Where:di = Difference between the results of the ith replicate pair of samples.Rmini = Results from the ith replicate sample pair at the minimum storage duration.Rmaxi = Results from the ith replicate sample pair at the maximum storage duration.

For single samples that can be reanalyzed for sample stability assessment (e.g., bag or canister samples and impinger samples that do not require digestion or extraction), the values for Rmini and Rmaxi will be obtained from the same sample rather than replicate samples.

7.4.1 Standard Deviation. Determine the standard deviation of the paired samples using Equation 301-2 of this method.

EP02DE16.001Where:SDd = Standard deviation of the differences of the paired samples.di = Difference between the results of the ith replicate pair of samples.dm = Mean of the paired sample differences.n = Total number of paired samples.

7.4.2 T Test. Test the difference in the results for statistical significance by calculating the t-statistic and determining if the mean of the differences between the results at the minimum storage duration and the results after the maximum storage duration is significant at the 95 percent confidence level and n-1 degrees of freedom. Calculate the value of the t-statistic using Equation 301-3 of this method.

EP02DE16.002Where:t = t-statistic.dm = The mean of the paired sample differences.SDd = Standard deviation of the differences of the paired samples.n = Total number of paired samples.

Compare the calculated t-statistic with the critical value of the t-statistic from Table 301-3 of this method. If the calculated t-value is less than the critical value, the difference is not statistically significant. Therefore, the sampling, analysis, and sample storage procedures ensure stability, and you may submit a request for validation of the candidate test method. If the calculated t-value is greater than the critical value, the difference is statistically significant, and you must repeat the procedures in Section 7.2 or 7.3 of this method with new samples using a shorter proposed maximum storage duration or improved handling and storage procedures.

Bias and Precision8.0 What are the requirements for bias?

You must determine bias by comparing the results of sampling and analysis using the candidate test method against a reference value. The bias must be no more than ±10 percent for the candidate test method to be considered for application to multiple sources. A candidate test method with a bias greater than ±10 percent and less than or equal to ±30 percent can only be applied on a source-specific basis at the facility at which the validation testing was conducted. In this case, you must use a correction factor for all data collected in the future using the candidate test method. If the bias is more than ±30 percent, the candidate test method is unacceptable.

9.0 What are the requirements for precision?

You may use a paired sampling system or a quadruplicate sampling system to establish precision for isotopic spiking. You must use a quadruplicate sampling system to establish precision for analyte spiking or when comparing a candidate test method to a validated method. If you are using analyte spiking or isotopic spiking, the precision, expressed as the relative standard deviation (RSD) of the candidate test method, must be less than or equal to 20 percent. If you are comparing the candidate test method to a validated test method, the candidate test method must be at least as precise as the validated method as determined by an F test (see Section 11.2.2 of this method).

10.0 What calculations must I perform for isotopic spiking?

You must analyze the bias, RSD, precision, and data acceptance for isotopic spiking tests according to the provisions in Sections 10.1 through 10.4 of this method.

10.1 Numerical Bias. Calculate the numerical value of the bias using the results from the analysis of the isotopic spike in the field samples and the calculated value of the spike according to Equation 301-4 of this method.

EP02DE16.003Where:B = Bias at the spike level.Sm = Mean of the measured values of the isotopically-labeled analyte in the samples.CS = Calculated value of the isotopically-labeled spike level.

10.2 Standard Deviation. Calculate the standard deviation of the Si values according to Equation 301-5 of this method.

EP02DE16.004Where:SD = Standard deviation of the candidate test method.Si = Measured value of the isotopically-labeled analyte in the ith field sample.Sm = Mean of the measured values of the isotopically-labeled analyte in the samples.n = Number of isotopically-spiked samples.

10.3 T Test. Test the bias for statistical significance by calculating the t-statistic using Equation 301-6 of this method. Use the standard deviation determined in Section 10.2 of this method and the numerical bias determined in Section 10.1 of this method.

Compare the calculated t-value with the critical value of the two-sided t-distribution at the 95 percent confidence level and n-1 degrees of freedom (see Table 301-3 of this method). When you conduct isotopic spiking according to the procedures specified in Sections 6.1 and 6.3 of this method as required, this critical value is 2.201 for 11 degrees of freedom. If the calculated t-value is less than or equal to the critical value, the bias is not statistically significant, and the bias of the candidate test method is acceptable. If the calculated t-value is greater than the critical value, the bias is statistically significant, and you must evaluate the relative magnitude of the bias using Equation 301-7 of this method.

If the relative bias is less than or equal to 10 percent, the bias of the candidate test method is acceptable for use at multiple sources. If the relative bias is greater than 10 percent but less than or equal to 30 percent, and if you correct all data collected with the candidate test method in the future for bias using the source-specific correction factor determined in Equation 301-8 of this method, the candidate test method is acceptable only for application to the source at which the validation testing was conducted and may not be applied to any other sites. If either of the preceding two cases applies, you may continue to evaluate the candidate test method by calculating its precision. If not, the candidate test method does not meet the requirements of Method 301.

If the CF is outside the range of 0.70 to 1.30, the data and method are considered unacceptable.

10.4 Precision. Calculate the RSD according to Equation 301-9 of this method.

EP02DE16.008Where:RSD = Relative standard deviation of the candidate test method.SD = Standard deviation of the candidate test method calculated in Equation 301-5 of this method.Sm = Mean of the measured values of the spike samples.

The data and candidate test method are unacceptable if the RSD is greater than 20 percent.

11.0 What calculations must I perform for comparison with a validated method if I am using quadruplicate replicate sampling systems?

If you are comparing a candidate test method to a validated method, then you must analyze the data according to the provisions in this section. If the data from the candidate test method fail either the bias or precision test, the data and the candidate test method are unacceptable. If the Administrator determines that the affected source has highly variable emission rates, the Administrator may require additional precision checks.

11.1 Bias Analysis. Test the bias for statistical significance at the 95 percent confidence level by calculating the t-statistic.

11.1.1 Bias. Determine the bias, which is defined as the mean of the differences between the candidate test method and the validated method (dm). Calculate di according to Equation 301-10 of this method.

EP02DE16.009Where:di = Difference in measured value between the candidate test method and the validated method for each quadruplicate sampling train.V1i = First measured value with the validated method in the ith quadruplicate sampling train.V2i = Second measured value with the validated method in the ith quadruplicate sampling train.P1i = First measured value with the candidate test method in the ith quadruplicate sampling train.P2i = Second measured value with the candidate test method in the ith quadruplicate sampling train.

Calculate the numerical value of the bias using Equation 301-11 of this method.

11.1.2 Standard Deviation of the Differences. Calculate the standard deviation of the differences, SDd, using Equation 301-12 of this method.

EP02DE16.011Where:SDd = Standard deviation of the differences between the candidate test method and the validated method.di = Difference in measured value between the candidate test method and the validated method for each quadruplicate sampling train.dm = Mean of the differences, di, between the candidate test method and the validated method.n = Number of quadruplicate sampling trains.

11.1.3 T Test. Calculate the t-statistic using Equation 301-13 of this method.

EP02DE16.012Where:t = Calculated t-statistic.dm = The mean of the differences, di, between the candidate test method and the validated method.SDd = Standard deviation of the differences between the candidate test method and the validated method.n = Number of quadruplicate sampling trains.

For the procedure comparing a candidate test method to a validated test method listed in Table 301-1 of this method, n equals six. Compare the calculated t-statistic with the critical value of the t-statistic, and determine if the bias is significant at the 95 percent confidence level (see Table 301-3 of this method). When six runs are conducted, as specified in Table 301-1 of this method, the critical value of the t-statistic is 2.571 for five degrees of freedom. If the calculated t-value is less than or equal to the critical value, the bias is not statistically significant and the data are acceptable. If the calculated t-value is greater than the critical value, the bias is statistically significant, and you must evaluate the magnitude of the relative bias using Equation 301-14 of this method.

EP02DE16.013Where:BR = Relative bias.B = Bias as calculated in Equation 301-11 of this method.VS = Mean of measured values from the validated method.

If the relative bias is less than or equal to 10 percent, the bias of the candidate test method is acceptable. On a source-specific basis, if the relative bias is greater than 10 percent but less than or equal to 30 percent, and if you correct all data collected in the future with the candidate test method for the bias using the correction factor, CF, determined in Equation 301-8 of this method (using VS for CS), the bias of the candidate test method is acceptable for application to the source at which the validation testing was conducted. If either of the preceding two cases applies, you may continue to evaluate the candidate test method by calculating its precision. If not, the candidate test method does not meet the requirements of Method 301.

11.2 Precision. Compare the estimated variance (or standard deviation) of the candidate test method to that of the validated test method according to Sections 11.2.1 and 11.2.2 of this method. If a significant difference is determined using the F test, the candidate test method and the results are rejected. If the F test does not show a significant difference, then the candidate test method has acceptable precision.

11.2.1 Candidate Test Method Variance. Calculate the estimated variance of the candidate test method according to Equation 301-15 of this method.

EP02DE16.014Where:Sp2 = Estimated variance of the candidate test method.di = The difference between the ith pair of samples collected with the candidate test method in a single quadruplicate train.n = Total number of paired samples (quadruplicate trains).

Calculate the estimated variance of the validated test method according to Equation 301-16 of this method.

EP02DE16.015Where:Sv2 = Estimated variance of the validated test method.di = The difference between the ith pair of samples collected with the validated test method in a single quadruplicate train.n = Total number of paired samples (quadruplicate trains).

11.2.2 The F test. Determine if the estimated variance of the candidate test method is greater than that of the validated method by calculating the F-value using Equation 301-17 of this method.

Compare the calculated F value with the one-sided confidence level for F from Table 301-4 of this method. The upper one-sided confidence level of 95 percent for F(6,6) is 4.28 when the procedure specified in Table 301-1 of this method for quadruplicate sampling trains is followed. If the calculated F value is greater than the critical F value, the difference in precision is significant, and the data and the candidate test method are unacceptable.

12.0 What calculations must I perform for analyte spiking?

You must analyze the data for analyte spike testing according to this section.

12.1 Bias Analysis. Test the bias for statistical significance at the 95 percent confidence level by calculating the t-statistic.

12.1.1 Bias. Determine the bias, which is defined as the mean of the differences between the spiked samples and the unspiked samples in each quadruplicate sampling train minus the spiked amount, using Equation 301-18 of this method.

EP02DE16.017Where:di = Difference between the spiked samples and unspiked samples in each quadruplicate sampling train minus the spiked amount.S1i = Measured value of the first spiked sample in the ith quadruplicate sampling train.S2i = Measured value of the second spiked sample in the ith quadruplicate sampling train.M1i = Measured value of the first unspiked sample in the ith quadruplicate sampling train.M2i = Measured value of the second unspiked sample in the ith quadruplicate sampling train.CS = Calculated value of the spike level.

Calculate the numerical value of the bias using Equation 301-19 of this method.

EP02DE16.018Where:B = Numerical value of the bias.di = Difference between the spiked samples and unspiked samples in each quadruplicate sampling train minus the spiked amount.n = Number of quadruplicate sampling trains.

12.1.2 Standard Deviation of the Differences. Calculate the standard deviation of the differences using Equation 301-20 of this method.

EP02DE16.019Where:SDd = Standard deviation of the differences of paired samples.di = Difference between the spiked samples and unspiked samples in each quadruplicate sampling train minus the spiked amount.dm = The mean of the differences, di, between the spiked samples and unspiked samples.n = Total number of quadruplicate sampling trains.

12.1.3 T Test. Calculate the t-statistic using Equation 301-21 of this method, where n is the total number of test sample differences (di). For the quadruplicate sampling system procedure in Table 301-1 of this method, n equals six.

EP02DE16.020Where:t = Calculated t-statistic.dm = Mean of the difference, di, between the spiked samples and unspiked samples.SDd = Standard deviation of the differences of paired samples.n = Number of quadruplicate sampling trains.

Compare the calculated t-statistic with the critical value of the t-statistic, and determine if the bias is significant at the 95 percent confidence level. When six quadruplicate runs are conducted, as specified in Table 301-1 of this method, the 2-sided confidence level critical value is 2.571 for the five degrees of freedom. If the calculated t-value is less than the critical value, the bias is not statistically significant and the data are acceptable. If the calculated t-value is greater than the critical value, the bias is statistically significant and you must evaluate the magnitude of the relative bias using Equation 301-22 of this method.

EP02DE16.021Where:BR = Relative bias.B = Bias at the spike level from Equation 301-19 of this method.CS = Calculated value at the spike level.

If the relative bias is less than or equal to 10 percent, the bias of the candidate test method is acceptable. On a source-specific basis, if the relative bias is greater than 10 percent but less than or equal to 30 percent, and if you correct all data collected with the candidate test method in the future for the magnitude of the bias using Equation 301-8, the bias of the candidate test method is acceptable for application to the tested source at which the validation testing was conducted. Proceed to evaluate precision of the candidate test method.

12.2 Precision. Calculate the standard deviation using Equation 301-23 of this method.

EP02DE16.022Where:SD = Standard deviation of the candidate test method.Si = Measured value of the analyte in the ith spiked sample.Sm = Mean of the measured values of the analyte in all the spiked samples.n = Number of spiked samples.

Calculate the RSD of the candidate test method using Equation 301-9 of this method, where SD and Sm are the values from Equation 301-23 of this method. The data and candidate test method are unacceptable if the RSD is greater than 20 percent.

13.0 How do I conduct tests at similar sources?

If the Administrator has approved the use of an alternative test method to a test method required in 40 CFR part 59, 60, 61, 63, or 65 for an affected source, and you would like to apply the alternative test method to a similar source, then you must petition the Administrator as described in Section 17.1.1 of this method.

Optional Requirements14.0 How do I use and conduct ruggedness testing?

Ruggedness testing is an optional requirement for validation of a candidate test method that is intended for the source where the validation testing was conducted. Ruggedness testing is required for validation of a candidate test method intended to be used at multiple sources. If you want to use a validated test method at a concentration that is different from the concentration in the applicable emission limitation under 40 CFR part 59, 60, 61, 63, or 65, or for a source category that is different from the source category that the test method specifies, then you must conduct ruggedness testing according to the procedures in Reference 18.16 of Section 18.0 of this method and submit a request for a waiver for conducting Method 301 at that different source category according to Section 17.1.1 of this method.

Ruggedness testing is a study that can be conducted in the laboratory or the field to determine the sensitivity of a method to parameters such as analyte concentration, sample collection rate, interferent concentration, collection medium temperature, and sample recovery temperature. You conduct ruggedness testing by changing several variables simultaneously instead of changing one variable at a time. For example, you can determine the effect of seven variables in only eight experiments. (W.J. Youden, Statistical Manual of the Association of Official Analytical Chemists, Association of Official Analytical Chemists, Washington, DC, 1975, pp. 33-36).

15.0 How do I determine the Limit of Detection for the candidate test method?

Determination of the Limit of Detection (LOD) as specified in Sections 15.1 and 15.2 of this method is required for source-specific method validation and validation of a candidate test method intended to be used for multiple sources.

15.1 Limit of Detection. The LOD is the minimum concentration of a substance that can be measured and reported with 99 percent confidence that the analyte concentration is greater than zero. For this protocol, the LOD is defined as three times the standard deviation, So, at the blank level.

15.2 Purpose. The LOD establishes the lower detection limit of the candidate test method. You must calculate the LOD using the applicable procedures found in Table 301-5 of this method. For candidate test methods that collect the analyte in a sample matrix prior to an analytical measurement, you must determine the LOD using Procedure I in Table 301-5 of this method by calculating a method detection limit (MDL) as described in proposed 40 CFR part 136, appendix B. For the purposes of this section, the LOD is equivalent to the calculated MDL. For radiochemical methods, use the Multi-Agency Radiological Laboratory Analytical Protocols (MARLAP) Manual (i.e., use the minimum detectable concentration (MDC) and not the LOD) available at http://www2.epa.gov/radiation/marlap-manual-and-supporting-documents.

Other Requirements and Information16.0 How do I apply for approval to use a candidate test method?

16.1 Submitting Requests. You must request to use a candidate test method according to the procedures in § 63.7(f) or similar sections of 40 CFR parts 59, 60, 61, and 65 (§ 59.104, § 59.406, § 60.8(b), § 61.13(h)(ii), or § 65.158(a)(2)(iii)). You cannot use a candidate test method to meet any requirement under these parts until the Administrator has approved your request. The request must include a field validation report containing the information in Section 16.2 of this method. You must submit the request to the Group Leader, Measurement Technology Group, U.S. Environmental Protection Agency, E143-02, Research Triangle Park, NC 27711.

16.2 Field Validation Report. The field validation report must contain the information in Sections 16.2.1 through 16.2.8 of this method.

16.2.1 Regulatory Objectives for the Testing, Including a Description of the Reasons for the Test, Applicable Emission Limits, and a Description of the Source.

16.2.2 Summary of the Results and Calculations Shown in Sections 6.0 Through 16.0 of This Method, as Applicable.

16.2.3 Reference Material Certification and Value(s).

16.2.4 Discussion of Laboratory Evaluations.

16.2.5 Discussion of Field Sampling.

16.2.6 Discussion of Sample Preparation and Analysis.

16.2.7 Storage Times of Samples (and Extracts, if Applicable).

16.2.8 Reasons for Eliminating Any Results.

17.0 How do I request a waiver?

17.1 Conditions for Waivers. If you meet one of the criteria in Section 17.1.1 or 17.1.2 of this method, the Administrator may waive the requirement to use the procedures in this method to validate an alternative or other candidate test method. In addition, if the EPA currently recognizes an appropriate test method or considers the candidate test method to be satisfactory for a particular source, the Administrator may waive the use of this protocol or may specify a less rigorous validation procedure.

17.1.1 Similar Sources. If the alternative or other candidate test method that you want to use was validated for source-specific application at another source and you can demonstrate to the Administrator's satisfaction that your affected source is similar to that validated source, then the Administrator may waive the requirement for you to validate the alternative or other candidate test method. One procedure you may use to demonstrate the applicability of the method to your affected source is to conduct a ruggedness test as described in Section 14.0 of this method.

17.1.2 Documented Methods. If the bias and precision of the alternative or other candidate test method that you are proposing have been demonstrated through laboratory tests or protocols different from this method, and you can demonstrate to the Administrator's satisfaction that the bias and precision apply to your application, then the Administrator may waive the requirement to use this method or to use part of this method.

17.2 Submitting Applications for Waivers. You must sign and submit each request for a waiver from the requirements in this method in writing. The request must be submitted to the Group Leader, Measurement Technology Group, U.S. Environmental Protection Agency, E143-02, Research Triangle Park, NC 27711.

17.3 Information Application for Waiver. The request for a waiver must contain a thorough description of the candidate test method, the intended application, and results of any validation or other supporting documents. The request for a waiver must contain, at a minimum, the information in Sections 17.3.1 through 17.3.4 of this method. The Administrator may request additional information if necessary to determine whether this method can be waived for a particular application.

17.3.1 A Clearly Written Test Method. The candidate test method should be written preferably in the format of 40 CFR part 60, appendix A, Test Methods. Additionally, the candidate test must include an applicability statement, concentration range, precision, bias (accuracy), and minimum and maximum storage durations in which samples must be analyzed.

17.3.2 Summaries of Previous Validation Tests or Other Supporting Documents. If you use a different procedure from that described in this method, you must submit documents substantiating the bias and precision values to the Administrator's satisfaction.

17.3.3 Ruggedness Testing Results. You must submit results of ruggedness testing conducted according to Section 14.0 of this method, sample stability conducted according to Section 7.0 of this method, and detection limits conducted according to Section 15.0 of this method, as applicable. For example, you would not need to submit ruggedness testing results if you will be using the method at the same affected source and level at which it was validated.

17.3.4 Applicability Statement and Basis for Waiver Approval. Discussion of the applicability statement and basis for approval of the waiver. This discussion should address as applicable the following: Applicable regulation, emission standards, effluent characteristics, and process operations.

18.0 Where can I find additional information?

You can find additional information in the references in Sections 18.1 through 18.17 of this method.

18.4 International Conference on Harmonization of Technical Requirements for the Registration of Pharmaceuticals for Human Use, ICH-Q2A, “Text on Validation of Analytical Procedures,” 60 FR 11260 (March 1995).

Table 301-1—Sampling ProceduresIf you are . . .You must collect . . .Comparing the candidate test method against a validated methodA total of 24 samples using a quadruplicate sampling system (a total of six sets of replicate samples). In each quadruplicate sample set, you must use the validated test method to collect and analyze half of the samples.Using isotopic spiking (can only be used with methods capable of measurement of multiple isotopes simultaneously)A total of 12 samples, all of which are spiked with isotopically-labeled analyte. You may collect the samples either by obtaining six sets of paired samples or three sets of quadruplicate samples.Using analyte spikingA total of 24 samples using the quadruplicate sampling system (a total of six sets of replicate samples—two spiked and two unspiked).Table 301-2—Storage and Sampling Procedures for Stack Test EmissionsIf you are . . .With . . .Then you must . . .Using isotopic or analyte spiking proceduresSample container (bag or canister) or impinger sampling systems that are not subject to dilution or other preparation stepsAnalyze six of the samples within 7 days and then analyze the same six samples at the proposed maximum storage duration or 2 weeks after the initial analysis.Sorbent and impinger sampling systems that require extraction or digestionExtract or digest six of the samples within 7 days and extract or digest six other samples at the proposed maximum storage duration or 2 weeks after the first extraction or digestion. Analyze an aliquot of the first six extracts (digestates) within 7 days and proposed maximum storage duration or 2 weeks after the initial analysis. This will allow analysis of extract storage impacts.Sorbent sampling systems that require thermal desorptionAnalyze six samples within 7 days. Analyze another set of six samples at the proposed maximum storage time or within 2 weeks of the initial analysis.Comparing a candidate test method against a validated test methodSample container (bag or canister) or impinger sampling systems that are not subject to dilution or other preparation stepsAnalyze at least six of the candidate test method samples within 7 days and then analyze the same six samples at the proposed maximum storage duration or within 2 weeks of the initial analysis.Sorbent and impinger sampling systems that require extraction or digestionExtract or digest six of the candidate test method samples within 7 days and extract or digest six other samples at the proposed maximum storage duration or within 2 weeks of the first extraction or digestion. Analyze an aliquot of the first six extracts (digestates) within 7 days and an aliquot at the proposed maximum storage durations or within 2 weeks of the initial analysis. This will allow analysis of extract storage impacts.Sorbent systems that require thermal desorptionAnalyze six samples within 7 days. Analyze another set of six samples at the proposed maximum storage duration or within 2 weeks of the initial analysis.Table 301-3—Critical Values of t for the Two-Tailed 95 Percent Confidence LimitDegrees of freedomt95112.70624.30333.18242.77752.57162.44772.36582.30692.262102.228112.201Table 301-4—Upper Critical Values of the F Distribution for the 95 Percent Confidence LimitNumerator (k1) and

denominator (k2) degrees of freedom

F{F>F.05(k1,k2)}1,1161.42,219.03,39.34,46.395,55.056,64.287,73.798,83.449,93.1810,102.98Table 301-5—Procedures for Estimating SoIf the estimated LOD (LOD1, expected approximate LOD concentration level) is no more than twice the calculated LOD or an analyte in a sample matrix was collected prior to an analytical measurement, use Procedure I as follows.If the estimated LOD (LOD1, expected approximate LOD concentration level) is greater than twice the calculated LOD, use Procedure II as followsProcedure IProcedure IIDetermine the LOD by calculating a method detection limit (MDL) as described in proposed 40 CFR part 136, appendix BPrepare two additional standards (LOD2 and LOD3) at concentration levels lower than the standard used in Procedure I (LOD1).Sample and analyze each of these standards (LOD2 and LOD3) at least seven times.Calculate the standard deviation (S2 and S3) for each concentration level.Plot the standard deviations of the three test standards (S1, S2 and S3) as a function of concentration.Draw a best-fit straight line through the data points and extrapolate to zero concentration. The standard deviation at zero concentration is So.Calculate the LOD0 (referred to as the calculated LOD) as 3 times So.[FR Doc. 2016-27544 Filed 12-1-16; 8:45 am]BILLING CODE 6560-50-P81232Friday, December 2, 2016NoticesDEPARTMENT OF AGRICULTURECouncil for Native American Farming and Ranching: Public MeetingAGENCY:

Office of Tribal Relations, USDA.

ACTION:

Notice of public meeting; correction.

SUMMARY:

This notice announces a forthcoming meeting of The Council for Native American Farming and Ranching (CNAFR), a public advisory committee of the Office of Tribal Relations (OTR). Notice of the meetings are provided in accordance with section 10(a)(2) of the Federal Advisory Committee Act, as amended. This will be the first meeting held during fiscal year 2017 and will consist of, but not be limited to: Hearing public comments, update of USDA programs and activities, and discussion of committee priorities. This meeting will be open to the public.

DATES:

The meeting will be held on December 8, 2016, 10:00 a.m. to 6:00 p.m., and December 9, 2016, 8:30 a.m. to 6:00 p.m. The meeting will be open to the public on both days. Note that a period for public comment will be held on December 8, 2016, from 2:00 p.m. to 4:00 p.m.

ADDRESSES:

The meeting will be held at the Flamingo Hotel, 3555 S. Las Vegas Boulevard, Las Vegas, Nevada 89109, in the El Dorado Room.

In accordance with the provisions of the Federal Advisory Committee Act (FACA), as amended (5 U.S.C. App. 2), USDA established an advisory council for Native American farmers and ranchers. The CNAFR is a discretionary advisory committee established under the authority of the Secretary of Agriculture.

The CNAFR will operate under the provisions of the FACA and report to the Secretary of Agriculture. The purpose of the CNAFR is (1) to advise the Secretary of Agriculture on issues related to the participation of Native American farmers and ranchers in USDA programs; (2) to transmit recommendations concerning any changes to USDA regulations or internal guidance or other measures that would eliminate barriers to program participation for Native American farmers and ranchers; (3) to examine methods of maximizing the number of new farming and ranching opportunities created by USDA programs through enhanced extension and financial literacy services; (4) to examine methods of encouraging intergovernmental cooperation to mitigate the effects of land tenure and probate issues on the delivery of USDA programs; (5) to evaluate other methods of creating new farming or ranching opportunities for Native American producers; and (6) to address other related issues as deemed appropriate.

The Secretary of Agriculture selected a diverse group of members representing a broad spectrum of persons interested in providing solutions to the challenges of the aforementioned purposes. Equal opportunity practices were considered in all appointments to the CNAFR in accordance with USDA policies. The Secretary selected the members in November 2016.

Interested persons may present views, orally or in writing, on issues relating to agenda topics before the CNAFR. Written submissions may be submitted to the contact person on or before November 30, 2016. Oral presentations from the public will be heard from 2:00 p.m. to 4:00 p.m. on December 8, 2016. Those individuals interested in making formal oral presentations should notify the contact person and submit a brief statement of the general nature of the issue they wish to present and the names and addresses of proposed participants by November 30, 2016. All oral presentations will be given three (3) to five (5) minutes depending on the number of participants.

The OTR will also make the agenda available to the public via the OTR Web site http://www.usda.gov/tribalrelations no later than 10 business days before the meeting and at the meeting. The minutes from the meeting will be posted on the OTR Web site. OTR welcomes the attendance of the public at the CNAFR meetings and will make every effort to accommodate persons with physical disabilities or special needs. If you require special accommodations due to a disability, please notify the Contact Person, at least 10 business days in advance of the meeting.

The Department of Agriculture will submit the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13 on or after the date of publication of this notice. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, Washington, DC; New Executive Office Building, 725 17th Street NW., Washington, DC 20503. Commenters are encouraged to submit their comments to OMB via email to: OIRA_Submission@omb.eop.gov or fax (202) 395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602.

Comments regarding these information collections are best assured of having their full effect if received by January 3, 2017. Copies of the submission(s) may be obtained by calling (202) 720-8681.

An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.

Agricultural Marketing Service

Title: Generic Fruit Crops, Marketing Order and Agreement Division.

OMB Control Number: 0581-0189.

Summary of Collection: Industries enter into a marketing order program under the Agricultural Marketing Agreement Act (AMAA) of 1937, as amended by U.S.C. 601-674. Marketing Order programs provide an opportunity for producers of fresh fruits, vegetables and specialty crops in specified production areas, to work together to solve marketing problems that cannot be solved individually. Order regulations help ensure adequate supplies of high quality product and adequate returns to producers. Under the market orders, producers and handlers are nominated by their respective peers and serve as representatives on their respective committees/boards.

Need and Use of the Information: The information collected is essential to provide the respondents the type of service they request. The committees and boards have developed forms as a means for persons to file required information relating to supplies, shipments, and dispositions of their respective commodities. The information is used only by the authorized committees employees and representatives of USDA including AMS, Specialty Crops Programs' regional and headquarters' staff to administer the marketing order programs.

Description of Respondents: Business or other for-profit; Not-for-profit institutions; Farms.

Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act (FACA) that a meeting of the Nevada Advisory Committee (Committee) to the Commission will be held at 1:00 p.m. (Pacific Time) Thursday, December 8, 2016, for the purpose discussing a project proposal on the civil rights issues regarding municipal fees and policing practices in Nevada.

Date: The meeting will be held on Thursday, December 8, 2016, at 1:00 p.m. PST.

Public Call Information:

Dial: 888-503-8177.

Conference ID: 8691781.

FOR FURTHER INFORMATION CONTACT:

Angelica Trevino at atrevino@usccr.gov or (213) 894-3437.

SUPPLEMENTARY INFORMATION:

This meeting is available to the public through the following toll-free call-in number: 888-503-8177, conference ID number: 8691781. Any interested member of the public may call this number and listen to the meeting. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-977-8339 and providing the Service with the conference call number and conference ID number.

Members of the public are entitled to make comments during the open period at the end of the meeting. Members of the public may also submit written comments; the comments must be received in the Regional Programs Unit within 30 days following the meeting. Written comments may be mailed to the Regional Programs Unit, U.S. Commission on Civil Rights, 55 W. Monroe St., Suite 410, Chicago, IL 60603. They may be faxed to the Commission at (312) 353-8324, or emailed to David Mussatt, Regional Programs Unit at dmussatt@usccr.gov. Persons who desire additional information may contact the Regional Programs Unit at (312) 353-8311.

Records and documents discussed during the meeting will be available for public viewing prior to and after the meeting at http://facadatabase.gov/committee/meetings.aspx?cid=261. Please click on the “Meeting Details” and “Documents” links. Records generated from this meeting may also be inspected and reproduced at the Regional Programs Unit, as they become available, both before and after the meeting. Persons interested in the work of this Committee are directed to the Commission's Web site, http://www.usccr.gov, or may contact the Regional Programs Unit at the above email or street address.

Exceptional Circumstance: Pursuant to the Federal Advisory Committee Management Regulations (41 CFR 102-3.150), the notice for this meeting cancelation is given less than 15 calendar days prior to the meeting due to exceptional circumstance of the Committee project supporting the Commission's 2017 statutory enforcement report.

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

On November 14, 2016, the Department of Commerce (the Department) published in the Federal Register the Preliminary Determination of the antidumping duty investigation of certain carbon and alloy steel cut-to-length plate (CTL plate) from France. The Department is amending the Preliminary Determination of the investigation to correct two significant ministerial errors.

On November 14, 2016, the Department published in the Federal Register the Preliminary Determination of CTL plate from France.1 On November 14, 2016, Dillinger France S.A., (Dillinger France) a respondent in this investigation, alleged that the Department made a significant ministerial error in the Preliminary Determination.2

The product covered by this investigation is CTL plate from France. For a full description of the scope of this investigation, see the “Scope of the Investigation,” in Appendix I of this notice.

Significant Ministerial Error

A ministerial error is defined in 19 CFR 351.224(f) as “an error in addition, subtraction, or other arithmetic function, clerical error resulting from inaccurate copying, duplication, or the like, and any other similar type of unintentional error which the Secretary considers ministerial.” Further, 19 CFR 351.224(e) provides that the Department “will analyze any comments received and, if appropriate, correct any significant ministerial error by amending the preliminary determination.” A significant ministerial error is defined as a ministerial error, the correction of which, singly or in combination with other errors, would result in: (1) A change of at least five absolute percentage points in, but not less than 25 percent of, the weighted-average dumping margin calculated in the original (erroneous) preliminary determination; or (2) a difference between a weighted-average dumping margin of zero or de minimis and a weighted-average dumping margin of greater than de minimis or vice versa.3

3See 19 CFR 351.224(g)(1) and (2).

Ministerial Error Allegation

Dillinger France alleges that the Department erred in its preliminary determination by not excluding Dillinger France's intra-company sales from its U.S. sales database, which resulted in the double-counting of these sales in the margin calculation. No other party commented on this issue. After comparing the ministerial error allegation against the U.S. sales databases, we agree with the respondent that we inadvertently double-counted its intra-company U.S. sales. Additionally, we identified a further error in the preliminary determination margin calculation. Specifically, we inadvertently failed to cap certain reported freight revenue and to offset the movement expenses by this additional capped freight revenue amount.

Pursuant to 19 CFR 351.224(g)(2), these errors are significant because their correction results in a change of at least five absolute percentage points in, but not less than 25 percent of, the weighted-average dumping margin calculated in the original preliminary determination (i.e., change from a weighted-average dumping margin of 12.97 percent to 6.43 percent). Therefore, we are correcting these errors and amending our preliminary determination accordingly.4

We are amending the preliminary determination of sales at less than fair value for CTL plate from France to reflect the correction of significant ministerial errors made in the margin calculation of that determination for Dillinger France in accordance with 19 CFR 351.224(e). The “All-Others” Rate was based on the simple average of the margins calculated for Dillinger France and Industeel France S.A. (Industeel), the other mandatory respondent in this investigation. Thus, we are also amending the “All-Others” rate to account for the change in Dillinger France's margin. We are amending the calculation of the all-others rate to base it on the weighted average of the margins calculated for Dillinger France and Industeel using publicly-ranged data. Because we cannot apply our normal methodology of calculating a weighted-average margin due to requests to protect business-proprietary information, we find this rate to be the best proxy of the actual weighted-average margin determined for these respondents.5 As a result of the correction of the ministerial error, the revised weighted-average dumping margins are as follows:

5See, e.g.,Welded Line Pipe from the Republic of Turkey: Final Determination of Sales at Less Than Fair Value, 80 FR 61362, 61363 (October 13, 2015). For further discussion of the amended calculation of the all-others rate, see Amended Preliminary Determination Memorandum.

The collection of cash deposits and suspension of liquidation will be revised according to the rates established in this amended preliminary determination, in accordance with section 733(d) of the Tariff Act of 1930, as amended (the Act). Because these amended rates result in reduced cash deposit rates, they will be effective retroactively to November 14, 2016, the date of publication of the Preliminary Determination.

International Trade Commission Notification

In accordance with section 733(f) of the Act, we notified the International Trade Commission of our amended preliminary determination.

Disclosure

We intend to disclose the calculations performed to parties in this proceeding within five days after public announcement of the amended preliminary determination, in accordance with 19 CFR 351.224.

This amended preliminary determination is issued and published in accordance with sections 733(f) and 777(i) of the Act and 19 CFR 351.224(e).

Dated: November 29, 2016.Paul Piquado,Assistant Secretary for Enforcement and Compliance.Appendix IScope of the Investigation

The products covered by this investigation are certain carbon and alloy steel hot-rolled or forged flat plate products not in coils, whether or not painted, varnished, or coated with plastics or other non-metallic substances (cut-to-length plate). Subject merchandise includes plate that is produced by being cut-to-length from coils or from other discrete length plate and plate that is rolled or forged into a discrete length. The products covered include (1) Universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, and of a thickness of not less than 4 mm, which are not in coils and without patterns in relief), and (2) hot-rolled or forged flat steel products of a thickness of 4.75 mm or more and of a width which exceeds 150 mm and measures at least twice the thickness, and which are not in coils, whether or not with patterns in relief. The covered products described above may be rectangular, square, circular or other shapes and include products of either rectangular or non-rectangular cross-section where such non-rectangular cross-section is achieved subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges).

For purposes of the width and thickness requirements referenced above, the following rules apply:

(1) Except where otherwise stated where the nominal and actual thickness or width measurements vary, a product from a given subject country is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above; and

(2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; and (2) the carbon content is 2 percent or less by weight.

Subject merchandise includes cut-to-length plate that has been further processed in the subject country or a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, beveling, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the cut-to-length plate.

All products that meet the written physical description, are within the scope of this investigation unless specifically excluded or covered by the scope of an existing order. The following products are outside of, and/or specifically excluded from, the scope of this investigation:

(1) Products clad, plated, or coated with metal, whether or not painted, varnished or coated with plastic or other non-metallic substances;

(2) military grade armor plate certified to one of the following specifications or to a specification that references and incorporates one of the following specifications:

• MIL-A-12560,

• MIL-DTL-12560H,

• MIL-DTL-12560J,

• MIL-DTL-12560K,

• MIL-DTL-32332,

• MIL-A-46100D,

• MIL-DTL-46100-E,

• MIL-46177C,

• MIL-S-16216K Grade HY80,

• MIL-S-16216K Grade HY100,

• MIL-S-24645A HSLA-80;

• MIL-S-24645A HSLA-100,

• T9074-BD-GIB-010/0300 Grade HY80,

• T9074-BD-GIB-010/0300 Grade HY100,

• T9074-BD-GIB-010/0300 Grade HSLA80,

• T9074-BD-GIB-010/0300 Grade HSLA100, and

• T9074-BD-GIB-010/0300 Mod. Grade HSLA115,

except that any cut-to-length plate certified to one of the above specifications, or to a military grade armor specification that references and incorporates one of the above specifications, will not be excluded from the scope if it is also dual- or multiple-certified to any other non-armor specification that otherwise would fall within the scope of this order;

(3) stainless steel plate, containing 10.5 percent or more of chromium by weight and not more than 1.2 percent of carbon by weight;

(4) CTL plate meeting the requirements of ASTM A-829, Grade E 4340 that are over 305 mm in actual thickness;

(5) Alloy forged and rolled CTL plate greater than or equal to 152.4 mm in actual thickness meeting each of the following requirements:

(b) Having cleanliness in accordance with ASTM E45 method A (Thin and Heavy): A not exceeding 1.5, B not exceeding 1.5, C not exceeding 1.0, D not exceeding 1.5;

(c) Having the following mechanical properties:

(i) With a Brinell hardness not more than 237 HBW measured in all parts of the product including mid thickness; and having a Yield Strength of 75ksi min and UTS 95ksi or more, Elongation of 18% or more and Reduction of area 35% or more; having charpy V at −75 degrees F in the longitudinal direction equal or greater than 15 ft. lbs (single value) and equal or greater than 20 ft. lbs (average of 3 specimens) and conforming to the requirements of NACE MR01-75; or

(ii) With a Brinell hardness not less than 240 HBW measured in all parts of the product including mid thickness; and having a Yield Strength of 90 ksi min and UTS 110 ksi or more, Elongation of 15% or more and Reduction of area 30% or more; having charpy V at −40 degrees F in the longitudinal direction equal or greater than 21 ft. lbs (single value) and equal or greater than 31 ft. lbs (average of 3 specimens);

(b) Having cleanliness in accordance with ASTM E45 method A (Thin and Heavy): A not exceeding 1.0(t) and 0.5(h), B not exceeding 1.5(t) and 1.0(h), C not exceeding 1.0(t) and 0.5(h), and D not exceeding 1.5(t) and 1.0(h);

(c) Having the following mechanical properties: A Brinell hardness not less than 350 HBW measured in all parts of the product including mid thickness; and having a Yield Strength of 145ksi or more and UTS 160ksi or more, Elongation of 15% or more and Reduction of area 35% or more; having charpy V at −40 degrees F in the transverse direction equal or greater than 20 ft. lbs (single value) and equal or greater than 25 ft. lbs (average of 3 specimens);

The products subject to the investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7225.40.1110, 7225.40.1180, 7225.40.3005, 7225.40.3050, 7226.20.0000, and 7226.91.5000.

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

On October 26, 2016, the Department of Commerce (the “Department”) published the notice of initiation and preliminary results of the changed circumstances review of the antidumping duty (“AD”) order on stainless steel bar (“SSB”) from Spain. The Department preliminarily determined that Sidenor Aceros Especiales S.L. (“Sidenor”) is the successor-in-interest to Gerdau Aceros Especiales Europa S.L. (“Gerdau”) for purposes of the AD order and, as such, is entitled to Gerdau's cash deposit rate with respect to entries of subject merchandise. We invited interested parties to comment on the Preliminary Results. As no parties submitted comments, and there is no additional information or evidence on the record, the Department is making no changes to the Preliminary Results.

On September 6, 2016, Sidenor informed the Department that, effective May 20, 2016, the following occurred: (1) Gerdau S.A., the Brazilian owner of Gerdau Holdings Europa S.A.U., including its Spanish subsidiary company Gerdau, sold its European holdings to Clerbil S.L.; and (2) Clerbil S.L. renamed Gerdau Holdings Europa S.A.U. to be Sidenor Holdings Europa S.A.U.; and Gerdau, to be Sidenor, while leaving its operations mostly unchanged.1 Citing section 751(b) of the of the Tariff Act of 1930, as amended (“the Act”) and 19 CFR 351.216, Sidenor requested that the Department initiate a changed circumstances review and determine that Sidenor is the successor-in-interest to Gerdau. On October 26, 2016, the Department initiated this changed circumstances review and published the notice of preliminary results, determining that Sidenor is the successor-in-interest to Gerdau.2

The merchandise subject to the order is SSB. The term SSB with respect to the order means articles of stainless steel in straight lengths that have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise cold-finished, or ground, having a uniform solid cross section along their whole length in the shape of circles, segments of circles, ovals, rectangles (including squares), triangles, hexagons, octagons or other convex polygons. SSB includes cold-finished SSBs that are turned or ground in straight lengths, whether produced from hot-rolled bar or from straightened and cut rod or wire, and reinforcing bars that have indentations, ribs, grooves, or other deformations produced during the rolling process. Except as specified above, the term does not include stainless steel semi-finished products, cut length flat-rolled products (i.e., cut length rolled products which if less than 4.75 mm in thickness have a width measuring at least 10 times the thickness, or if 4.75 mm or more in thickness having a width which exceeds 150 mm and measures at least twice the thickness), wire (i.e., cold-formed products in coils, of any uniform solid cross section along their whole length, which do not conform to the definition of flat-rolled products), and angles, shapes and sections. The SSB subject to the order is currently classifiable under subheadings 7222.10.00, 7222.11.00, 7222.19.00, 7222.20.00, 7222.30.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive.3

3 The HTSUS numbers provided in the scope have changed since the publication of the order. See Amended Final Determination and Antidumping Duty Order: Stainless Steel Bar From Spain, 60 FR 11656 (March 2, 1995).

Final Results of Changed Circumstances Review

Because no party submitted a case brief in response to the Department's Preliminary Results, and because the record contains no other information or evidence that calls into question the Preliminary Results, the Department continues to find that Sidenor is the successor-in-interest to Gerdau, and is entitled to Gerdau's cash deposit rate with respect to entries of merchandise subject to the AD order on SSB from Spain.4

4 For a complete discussion of the Department's findings, which remain unchanged in these final results and which are herein incorporated by reference and adopted by this notice, see generally Preliminary Results.

Instructions to U.S. Customs and Border Protection

Based on these final results, we will instruct U.S. Customs and Border Protection to collect estimated antidumping duties for all shipments of subject merchandise exported by Sidenor and entered, or withdrawn from warehouse, for consumption on or after the publication of this notice in the Federal Register at the current AD cash deposit rate for Gerdau (i.e., 0 percent). This case deposit requirement shall remain in effect until further notice.

Notification to Interested Parties

This notice serves as a final reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.

We are issuing and publishing this final results notice in accordance with sections 751(b) and 777(i) of the Act, and 19 CFR 351.216.

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Notice of loan repayment.

SUMMARY:

NMFS issues this notice to inform interested parties that the Aleutian Island Golden (Brown) King crab (a/k/a WAG and EAG) sub-loan in the fishing capacity reduction program for the Bering Sea and Aleutian Islands (BSAI) King and Tanner Crab Fisheries has been repaid. Therefore, buyback fee collections on Aleutian Island Golden (Brown) King crab will cease for all landings after October 31, 2016.

On July 28, 2005, NMFS published a Federal Register document (69 FR 67100) proposing regulations to implement an industry fee system for repaying the reduction loan. The final rule was published September 16, 2005 (70 FR 54652) and fee collection began on October 17, 2005. Interested persons should review these for further program details.

The Aleutian Island Golden (Brown) King crab sub-loan of the Bering Sea and Aleutian Islands (BSAI) King and Tanner Crab Capacity Reduction (Buyback) loan in the amount of $6,380,837.19 will be repaid in full upon receipt of buyback fees on landings through October 31, 2016. NMFS has received $10,004,785.86 to repay the principal and interest on this sub-loan since fee collection began October 17, 2005. Based on buyback fees received to date, landings after October 31, 2016, will not be subject to the buyback fee. Therefore, buyback loan fees will no longer be collected in the Aleutian Island Golden (Brown) King crab fishery on future landings.

Buyback fees not yet forwarded to NMFS for Aleutian Island Golden (Brown) King crab landings through October 31, 2016, should be forwarded to NMFS immediately. Any overpayment of buyback fees submitted to NMFS will be refunded on a pro-rata basis to the fish buyers/processors based upon best available fish ticket landings data. The fish buyers/processors should return excess buyback fees collected to the harvesters, including buyback fees collected but not yet remitted to NMFS for landings after October 31, 2016. Any discrepancies in fees owed and fees paid must be resolved immediately. After the sub-loan is closed, no further adjustments to fees paid and fees received can be made.

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Notice; public meeting.

SUMMARY:

The Pacific Fishery Management Council (Pacific Council) will host a webinar meeting of the Area 2A Pacific halibut governmental management entities, which will be open to the public.

DATES:

The Area 2A manager's webinar will be held on Wednesday, December 14, 2016, from 8:30 a.m. until 10:30 a.m., or until business for the day is complete.

ADDRESSES:

To attend the webinar (1) join the meeting by visiting this link http://www.joinwebinar.com; (2) enter the Webinar ID: 811-687-419, and (3) enter your name and email address (required). After logging in to the webinar, please (1) dial this TOLL number +1 (914) 614-3221 (not a toll-free number); (2) enter the attendee phone audio access code 867-903-330; and (3) then enter your audio phone pin (shown after joining the webinar). Participants are required to use their telephone, as this is the best practice to avoid technical issues and excessive feedback. Technical Information and System Requirements: PC-based attendees are required to use Windows® 7, Vista, or XP; Mac®-based attendees are required to use Mac OS® X 10.5 or newer; Mobile attendees are required to use iPhone®, iPad®, AndroidTM phone or Android tablet (See the GoToMeeting WebinarApps). You may send an email to Kris.Kleinschmidt@noaa.gov or contact him at (503) 820-2280, extension 425 for technical assistance. A public listening station will also be available at the Pacific Council office.

The primary purpose of the Area 2A Pacific halibut manager's meeting is to prepare and develop recommendations for the January 23-27, 2017 International Pacific Halibut Commission's (IPHC) annual meeting in Victoria, British Columbia, Canada. Recommendations generated from the meeting would be communicated to the IPHC by the Pacific Council's representative, Mr. Phil Anderson. Attendees may also address other assignments relating to Pacific halibut management. No management actions will be decided by the attendees. The meeting will be open to the public, and the agenda, which will be available one week before the meeting, will provide for a public comment period.

Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during these meetings. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.

Special Accommodations

The public listening station is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820-2425 at least 10 business days prior to the meeting date.

The U.S. Consumer Product Safety Commission (CPSC or the Commission) is publishing this Litigation Guidance to provide recommendations for best practices to all parties in relevant litigation related to providing an exemption in protective orders and settlement agreements for reporting information to the CPSC.

1 The Commission voted (3-2) to publish this notice in the Federal Register. Chairman Elliot F. Kaye and Commissioners Robert S. Adler and Marietta S. Robinson voted to approve publication of the notice. Commissioner Ann Marie Buerkle and Joseph P. Mohorovic voted against publication of the notice.

The CPSC is a public-health authority with a broad mandate to protect the public against unreasonable risks of injury associated with consumer products. See 15 U.S.C. 2051 (2014); See also Public Health Authority Notification, 79 FR 11769 (March 3, 2014). The Consumer Product Safety Act (CPSA) defines consumer products broadly, making the Commission responsible for ensuring the public's safety from thousands of different ever-evolving product lines. See 15 U.S.C. 2052 (2014). The timely collection of information regarding consumer product-related safety hazards is essential for carrying out the Commission's public health and safety mission.

Mandatory self-reporting of potential product hazards by manufacturers (including importers), retailers, and distributors (Industry Stakeholders) is a key element of CPSC's ability to identify potential substantial product hazards and subsequently take corrective action to protect the public. Such Industry Stakeholders are best situated to discover a potential product hazard and, thus, are statutorily required to report immediately to the CPSC when they obtain information that reasonably supports the conclusion that a product fails to comply with an applicable rule or standard, contains a defect which could create a substantial product hazard, or creates an unreasonable risk of serious injury or death. 15 U.S.C. 2064(b) (2014).

Despite the mandatory reporting requirement, the Commission believes Industry Stakeholders do not always meet their reporting obligations. Industry Stakeholders may fail to report potential product hazards altogether, may fail to report them in a timely manner and/or may fail to report new incidents that occur after the initial hazard has been reported.2

2 The CPSA recognizes that failures to report and delays in reporting may occur, and authorizes civil penalties up to $15,150,000 for any related series of violations for stakeholders who violate their reporting obligations. See 15 U.S.C. 2068-2069 (2014).

If Industry Stakeholders fail to report, CPSC has limited alternative means of obtaining this critical safety information. It is therefore possible that a product hazard will never come to CPSC's attention. Information in private litigation could, thus, be a key resource for the CPSC when Industry Stakeholders have not satisfied their reporting obligations. However, in some instances, confidentiality provisions imposed or enforced by the courts or agreed upon by private litigants may have prevented parties that are not industry stakeholders from sharing with the CPSC important product safety information they have discovered. See S. REP. NO. 110-439, at 6-8 (2008); see also Footnote 2 infra.

The motions and hearings involved in obtaining protective orders in private litigation for specific documents may result in enormous associated costs both in terms of money and time. This often leads to the use of “blanket” or “umbrella” protective orders covering the entirety of pre-trial discovery. See Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 529 F. Supp. 866, 879 (E.D. Pa. 1981) (finding that without blanket protective orders, a judge becomes a “veritable hostage” required to spend years on motions for individual documents). Rather than requiring a series of individual rulings for a large number of documents, blanket protective orders may create a presumption against disclosure for all or certain groups of information that then may be challenged individually for lack of good cause. See MANUAL FOR COMPLEX LITIGATION § 11.432 (2004). Such umbrella protective orders have become fairly common. See Zenith Radio Corp, 529 F. Supp. 866, 889 (E.D. Pa. 1981) (“We are unaware of any case in the past half-dozen years of even a modicum of complexity where an umbrella protective order . . . has not been agreed to by the parties); see also Jepson, Inc. v. Makita Elec. Works, LTD., 30 F.3d 854, 858 (7th Cir. 1994) (“stipulated protective orders are relatively common.”). Additionally, if incriminating documents outside the scope of a protective order are discovered before trial, defendants often demand blanket protective orders as a condition of settlement. Pansy v. Borough of Stroudsburg, 23 F.3d 772, 785-786 (3rd Cir. 1994). In order to facilitate settlements, courts are often willing to grant these blanket orders without significantly analyzing the public interests involved. Id.

The Commission believes that general acceptance of “blanket” or “umbrella” protective orders in private litigation increases the likelihood that such agreements will bar the reporting to the Commission by those who are not Industry Stakeholders of consumer product safety information that the CPSC needs to protect the public. Although a party could pursue a good-cause challenge to allow the reporting of such information, the practicalities involved create a significant disincentive—the party's attorneys must first recognize the information's relevance to the CPSC and then pursue a potentially costly series of motions and hearings that are unlikely to benefit their client directly. See Nick Saccone, Comment, Somewhere Between Florida, Texas, and Federal Rule of Civil Procedure 26(c): A Balanced Approach to Protective Orders and Confidentiality Settlements, 39 U. Tol. L. Rev. 729, 740 (2008) (“Satellite litigation concerning contested discovery requests often has little or no bearing on the ultimate result of the lawsuit, other than increasing the cost of litigation for both injured plaintiffs and defendants.”). Few parties will therefore even attempt to lift protective orders in order to inform the CPSC of relevant product safety information.

According to a report submitted by the United States Senate Committee on the Judiciary on the proposed Sunshine in Litigation Act of 2008, safety information related to dangerous playground equipment, collapsible cribs, and all-terrain vehicle design defects was kept from the CPSC by protective orders in private litigation. S. REP. NO. 110-439, at 6-8 (2008). A cursory review of other civil product liability cases reveals that protective orders are in place in cases involving additional consumer products that fall under the CPSC's jurisdiction.3 These protective orders prohibit parties from reporting to the CPSC information they obtain in the course of litigation that concerns potentially hazardous consumer products, including incident reports.

The Commission believes the best way to protect public health and safety is to preemptively exclude or exempt the reporting of relevant consumer product safety information to the CPSC (and other government public health and safety agencies) from all confidentiality provisions.

II. The Model: NHTSA's Enforcement Guidance Bulletin

The Commission has reviewed the National Highway Transportation Safety Administration's (NHTSA) guidance on this issue. NHTSA is situated similarly to the CPSC with a public health and safety mission to reduce traffic accidents and the deaths and injuries resulting from them. See 49 U.S.C. 30101 (2014). NHTSA's “ability to identify and define safety-related motor vehicle defects relies in large part on manufacturers' self-reporting.” NHTSA Enforcement Guidance Bulletin 2015-01: Recommended Best Practices for Protective Orders and Settlement Agreements in Civil Litigation, 81 FR 13026, 13026 (March 11, 2016) (hereinafter NHTSA Enforcement Guidance Bulletin). NHTSA found that it does not always receive such information from their industry stakeholders. Id. NHTSA recently issued an Enforcement Guidance Bulletin in an attempt to address the use of “protective orders, settlement agreements, or other confidentiality provisions” barring reporting to the agency. Id.

The NHTSA Enforcement Guidance Bulletin laid out a detailed, comprehensive and compelling legal analysis supporting the disclosure to public health authorities, notwithstanding confidentiality provisions in protective orders, settlements, and similar agreements. CPSC agrees with NHTSA that Rule 26 of the Federal Rules of Civil Procedure and various related state laws, as well as case law on public policy and contract law, all support the conclusion that government agencies with public health and safety missions should be excluded or exempted from the various relevant protective orders that are ubiquitous in private litigation today. NHTSA's legal analysis of this issue is available at: https://www.federalregister.gov/documents/2016/03/11/2016-05522/nhtsa-enforcement-guidance-bulletin-2015-01-recommended-best-practices-for-protective-orders-and.

CPSC further agrees with NHTSA that nondisclosure provisions may be appropriately used by courts and litigants to “promote full and complete disclosure, to prevent abuses of the discovery process, and to protect legitimate privacy and proprietary interests.” 81 FR 13029. However, when such orders and agreements shield relevant and actionable safety information behind nondisclosure provisions, they violate the good-cause requirement of Rule 26 of the Federal Rules of Civil Procedure, its state corollaries, and the well-established public policy favoring protecting public health and safety.

III. Recommendation for Best Practices

CPSC recommends, following the example set by NHTSA, that “all parties seek to include a provision in any private protective order or settlement agreement that—despite whatever restrictions on confidentiality are imposed, and whether entered into by consent or judicial fiat—specifically allows for disclosure of relevant [consumer product] safety information to [the CPSC] and other applicable authorities.” 81 FR 13029-13030. CPSC's proposed Litigation Guidance does not impose any new or additional requirements, but sets forth CPSC's recommendations for best practices when parties are considering confidentiality provisions in litigation related to consumer products within the CPSC's jurisdiction.

Parties in the process of establishing or already subject to confidentiality provisions may use this Litigation Guidance and CPSC's standing as a public-health authority to support a reporting exception to these provisions. See 79 FR 11769. For example, the exception could explicitly state “nothing herein shall be construed to prohibit any party from disclosing relevant consumer product safety information to the Consumer Product Safety Commission.” Alternatively, a clause might more generally state that “nothing herein shall be construed to prohibit any party from disclosing relevant safety information to a regulatory agency or government entity that has an interest in the subject matter of the underlying suit.” The CPSC, however, is not endorsing any particular language since the parties themselves are in the best position to determine how that may be accomplished.

IV. Conclusion

The CPSC is publishing this Litigation Guidance to provide recommendations for best practices when drafting protective orders, confidentiality agreements, and settlement agreements. The Litigation Guidance should be reviewed by judges, plaintiffs, and defendants, as well as those parties wishing to submit amicus briefs relating to protective orders and confidentiality agreements in ongoing litigation.

The Commission believes this Litigation Guidance is simple. Protective orders, confidentiality agreements and settlements (as well as other similar documents), should include language that allows any party to report consumer product safety information, incidents, injuries and deaths to the CPSC.4

4 The public is always encouraged to report relevant consumer product safety information to the CPSC via the CPSC's hotline [(800) 638-CPSC (2772)]; the CPSC's online reporting tool: www.saferproducts.gov; and by contacting the CPSC's Office of Compliance and Field Operations directly [(301) 504-7547].

The Commission notes that this Litigation Guidance is not a binding or enforceable rule and would not change any person's rights, duties or obligations under the CPSIA or any other Act administered by the Commission.

The Department of the Army has completed a Programmatic Environmental Assessment (PEA) for construction, operation, and maintenance of solar photovoltaic (PV) renewable energy projects on Army installations and is making the PEA and a draft Finding of No Significant Impact (FNSI) available for public comment. The draft FNSI incorporates the PEA, which does not identify any significant environmental impacts from the proposed action or any of the alternatives. The draft FNSI concludes that preparation of an environmental impact statement (EIS) is not required, and therefore will not be prepared.

The PEA is programmatic and nationwide in scope. For years, the Army has analyzed and implemented solar PV projects at Army installations across the country. In the PEA, the Army leveraged this experience with the goal of streamlining the National Environmental Policy Act process for future solar PV proposals, as appropriate, in a manner consistent with Council on Environmental Quality and Department of the Army regulations.

DATES:

The public comment period will end 30 days after publication of the Notice of Availability in the Federal Register by the Department of the Army.

Please contact the U.S. Army Environmental Command Public Affairs Office, (210) 466-1590 or toll-free 855-846-3940, or email at usarmy.jbsa.aec.nepa@mail.mil.

SUPPLEMENTARY INFORMATION:

The proposed action is to construct, operate, and maintain solar PV arrays and/or ancillary power systems on Army installations, to include U.S. Army Reserve facilities, Army National Guard sites, and joint bases managed by the Department of the Army (with all henceforth referred to only as “Army installations” or “installations”). The proposed action includes, for those solar PV projects where the existing infrastructure is insufficient, constructing (or upgrading) and maintaining the associated infrastructure required for the transmission and management of the generated electricity to the electric grid. Associated infrastructure includes but is not limited to electricity transformers, transmission and distribution lines, and sub or switching stations; as well as ancillary power control systems such as energy storage systems, micro-grid components, and back-up power generators. The proposed action may include real estate actions on Army lands where the projects could be funded and constructed by the Army, funded through a third party Power Purchase Agreement utilizing a lease of Army or Joint Base land to an independent power producer or the local regulated utility company, or funded via some other relationship with a private or public entity.

The projects being evaluated and analyzed would generally range from approximately 10 megawatt (MW) to 100 MW per site; however, the projects outside of this MW range (e.g., less than 10 MW) are inclusive in this proposed action. On average, seven acres of land are currently required to produce one MW of power. As this technology has evolved, the acreage requirement for one MW generating capacity has decreased; therefore, it is possible that future solar PV technologies may require even less acreage per MW; currently, approximately 70 acres of land would be required for a 10 MW site and 700 acres of land for a 100 MW site. PV systems on rooftops would generally expect to have capacity measured in watts or kilowatts (kW), not MW, and be of a much smaller size and scope.

The alternatives considered and analyzed in the PEA are the No Action alternative and three action alternatives, which are to implement the proposed action on greenfield sites (Alternative 1), on previously developed sites (Alternative 2), and on or over structures or impervious surfaces, such as buildings and carports (Alternative 3). Installations may choose any or all of the action alternative approaches to solar PV.

The goal of this programmatic approach is to streamline the NEPA process for the construction, operation, and maintenance of solar PV renewable energy projects by providing installations with sufficient detail about environmental impacts on resources to enable them to tier off of the PEA, as appropriate. Tiering from this PEA would avoid or reduce the costs of repetitive, similar analyses, and allow the Army to focus resources on only those site-specific environmental issues that merit a deeper analysis. Installations tiering from the PEA would use the checklist contained in the PEA to identify site-specific NEPA requirements. Where further analysis would be required to meet site-specific NEPA requirements, the PEA may still be used for tiering, allowing the installation to focus on those resources which require site-specific analysis.

Members of the public, federally-recognized Native American Tribes, Alaska Native Tribes, Native Hawaiian Organizations, and federal, state, and local agencies are invited to submit written comments on the PEA and/or draft FNSI.

The PEA and draft FNSI may be accessed at: http://www.aec.army.mil/Services/Support/NEPA/Documents.aspx.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501 et seq.), ED is proposing an extension of an existing information collection.

DATES:

Interested persons are invited to submit comments on or before January 31, 2017.

ADDRESSES:

To access and review all the documents related to the information collection listed in this notice, please use http://www.regulations.gov by searching the Docket ID number ED-2016-ICCD-0136. Comments submitted in response to this notice should be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov by selecting the Docket ID number or via postal mail, commercial delivery, or hand delivery. Please note that comments submitted by fax or email and those submitted after the comment period will not be accepted. Written requests for information or comments submitted by postal mail or delivery should be addressed to the Director of the Information Collection Clearance Division, U.S. Department of Education, 400 Maryland Avenue SW., LBJ, Room 2E-347, Washington, DC 20202-4537.

The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.

Abstract: These data will allow the Department to calculate the borrowers maximum eligibility period, subsidized usage period, and remaining eligibility period as described in 685.200(f)(1)(ii)-(f)(1)(iv), determine whether the borrower is eligible to receive an additional Direct Subsidized Loan, and ensure that borrowers do not receive Direct Subsidized Loans if they are no longer eligible to receive a Direct Subsidized Loan under 685.200(f)(2).

The Department will determine whether the borrower is responsible for accruing interest on their previously received Direct Subsidized Loans. To ensure that the Department has the information to necessary to make that determination, institutions will be required to report additional information to NSLDS. For example, institutions will be required to report: The CIP code and the credential level for the program in which a borrower is enrolled; the length of the program in academic years, weeks, or months (consistent with current institutional reporting in the COD System); and a more detailed enrollment status of the borrower (e.g., full-time, three-quarter-time, half-time, or less-than-half-time).

These data will allow the Department to determine whether a borrower who is not eligible for additional Direct Subsidized Loans is responsible for accruing interest on his or her previously received Direct Subsidized Loans.

The regulations implement a new statutory requirement that significantly limits a borrowers eligibility for Direct Subsidized Loans and potentially results in the borrower becoming responsible for accruing interest on existing Direct Subsidized Loans. Under section 485(l) of the HEA, which requires that borrowers be provided with entrance and exit counseling on the provisions governing federal student aid, institutions will be required to revise the entrance and exit counseling provided to borrowers.

For entrance counseling, the added counseling requirements under 685.304 will require institutions to explain the new provisions to borrowers.

In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.

DATES:

Interested persons are invited to submit comments on or before January 3, 2017.

ADDRESSES:

To access and review all the documents related to the information collection listed in this notice, please use http://www.regulations.gov by searching the Docket ID number ED-2016-ICCD-0105. Comments submitted in response to this notice should be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov by selecting the Docket ID number or via postal mail, commercial delivery, or hand delivery. Please note that comments submitted by fax or email and those submitted after the comment period will not be accepted. Written requests for information or comments submitted by postal mail or delivery should be addressed to the Director of the Information Collection Clearance Division, U.S. Department of Education, 400 Maryland Avenue SW., LBJ, Room 2E-347, Washington, DC 20202-4537.

The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.

Title of Collection: Student Assistance General Provisions—Subpart J—Approval of Independently Administered Tests.

Abstract: This request is for revision of the approval of the reporting and record-keeping requirements that are contained in the information collection 1845-0049 for Student Assistance General Provision regulations Subpart J—Approval of Independently Administered Tests; Specification of Passing Score; Approval of State Process. These regulations govern the application for and approval by the Secretary of assessments by a private test publisher or State that are used to measure a student's skills and abilities. The administration of approved ability to benefit (ATB) tests may be used to determine a student's eligibility for assistance for the Title IV student financial assistance programs authorized under the Higher Education Act of 1965, as amended (HEA) when, among other conditions, the student does not have a high school diploma or its recognized equivalent. The language of the current regulations has not changed.

Office of Energy Efficiency and Renewable Energy, Department of Energy.

ACTION:

Notice of petition for waiver and grant of interim waiver, and request for public comment.

SUMMARY:

This notice announces receipt of and publishes a petition for waiver from Miele Incorporated (Miele) seeking an exemption from specified portions of the U.S. Department of Energy (DOE) test procedure for determining the energy consumption of dishwashers that operate at 208 volts under Title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix C1. Section 2.2 of appendix C1 has provisions for testing at 115 and 240 volts only. Consequently, Miele submitted to DOE an alternate test procedure that allows for testing of one specified basic model at 208 volts. This notice also announces that DOE has granted Miele an interim waiver from the DOE dishwasher test procedure for the specified dishwasher basic model, subject to use of the alternative test procedure as set forth in this notice. DOE solicits comments, data, and information concerning Miele's petition and its suggested alternate test procedure.

DATES:

DOE will accept comments, data, and information with regard to the Miele petition until January 3, 2017.

ADDRESSES:

You may submit comments, identified by Case Number DW-012, by any of the following methods:

• Email: AS_Waiver_Requests@ee.doe.gov Include the case number [Case No. DW-012] in the subject line of the message. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form of encryption.

• Hand Delivery/Courier: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., 6th Floor, Washington, DC 20024. Telephone: (202) 586-6636. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

Docket: The docket, which includes Federal Register notices, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available.

Title III, Part B 1 of the Energy Policy and Conservation Act of 1975 (EPCA), Public Law 94-163 (42 U.S.C. 6291-6309, as codified) established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program that includes the dishwashers that are the focus of this notice.2 Part B includes definitions, test procedures, labeling provisions, energy conservation standards, and the authority to require information and reports from manufacturers. Further, Part B authorizes the Secretary of Energy to prescribe test procedures that are reasonably designed to produce results that measure energy efficiency, energy use, or estimated operating costs during a representative average-use cycle, and that are not unduly burdensome to conduct. (42 U.S.C. 6293(b)(3)) The test procedure for dishwashers is contained in Title 10 of the CFR part 430, subpart B, appendix C1, Uniform Test Method for Measuring the Energy Consumption of Dishwashers.

1 For editorial reasons, upon codification in the U.S. Code, Part B was redesignated as Part A.

2 All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act of 2015 (EEIA), Public Law 114-11 (April 30, 2015).

DOE's regulations set forth at 10 CFR 430.27 contain provisions that allow a person to seek a waiver from the test procedure requirements for a particular basic model of a type of covered consumer product when: (1) The petitioner's basic model for which the petition for waiver was submitted contains one or more design characteristics that prevent testing according to the prescribed test procedure, or (2) the prescribed test procedures may evaluate the basic model in a manner so unrepresentative of its true energy consumption characteristics as to provide materially inaccurate comparative data. 10 CFR 430.27(a)(1). A petitioner must include in its petition any alternate test procedures known to the petitioner to evaluate the basic model in a manner representative of its energy consumption. 10 CFR 430.27(b)(1)(iii).

DOE may grant a waiver subject to conditions, including adherence to alternate test procedures. 10 CFR 430.27(f)(2). As soon as practicable after the granting of any waiver, DOE will publish in the Federal Register a notice of proposed rulemaking to amend its regulations so as to eliminate any need for the continuation of such waiver. As soon thereafter as practicable, DOE will publish in the Federal Register a final rule. 10 CFR 430.27(l).

The waiver process also allows DOE to grant an interim waiver if it appears likely that the petition for waiver will be granted and/or if DOE determines that it would be desirable for public policy reasons to grant immediate relief pending a determination on the petition for waiver. 10 CFR 430.27(e)(2). Within one year of issuance of an interim waiver, DOE will either: (i) Publish in the Federal Register a determination on the petition for waiver; or (ii) publish in the Federal Register a new or amended test procedure that addresses the issues presented in the waiver. 10 CFR 430.27(h)(1). When DOE amends the test procedure to address the issues presented in a waiver, the waiver will automatically terminate on the date on which use of that test procedure is required to demonstrate compliance. 10 CFR 430.27(h)(2).

II. Petition for Waiver of Test Procedure and Application for Interim Waiver

On July 13, 2016, Miele filed a petition for waiver and application for interim waiver from the test procedure applicable to dishwashers set forth in 10 CFR part 430, subpart B, appendix C1. Miele has designed a dishwasher that runs on an electrical supply voltage of 208 volts. The existing test procedure under section 2.2 of 10 CFR part 430, subpart B, appendix C1 has provisions for testing at 115 and 240 volts only. In its petition for waiver, Miele submitted to DOE an alternate test procedure that allows for testing of one specified basic model at 208 volts.

DOE granted a petition for waiver submitted for the previous design generation of Miele dishwasher rated for 208 volts (Case No. DW-006) on December 27, 2011 as a waiver from the applicable residential dishwasher test procedure in 10 CFR part 430, subpart B, appendix C for certain basic models of dishwashers with a 208 volt supply voltage, provided that Miele tests and rates such products using the alternate test procedure described in the petition. 76 FR 80920.

As previously noted, an interim waiver may be granted if it appears likely that the petition for waiver will be granted, and/or if DOE determines that it would be desirable for public policy reasons to grant immediate relief pending a determination of the petition for waiver. See 10 CFR 430.27(e)(2).

DOE understands that absent an interim waiver, the basic model identified by Miele in its petition cannot be tested and rated for energy consumption on a basis representative of their true energy consumption characteristics. DOE has reviewed the alternate procedure suggested by Miele and concludes that it will allow for the accurate measurement of the energy use of these products, while alleviating the testing problems associated with Miele's implementation of dishwasher testing. Consequently, DOE has determined that Miele's petition for waiver will likely be granted and has decided that it is desirable for public policy reasons to grant Miele immediate relief pending a determination on the petition for waiver. Miele requests to use an alternate test procedure that would follow the test procedure for dishwashers prescribed by DOE at 10 CFR part 430, subpart B, appendix C1 with a modification of section 2.2 for dishwashers that operate with an electrical supply of 208 volts.

III. Summary of Grant of Interim Waiver

For the reasons stated above, DOE has granted Miele's application for interim waiver from testing for its specified dishwasher basic model. The substance of the interim waiver is summarized below.

Miele is required to test and rate Miele dishwasher basic model PG8056-208V according to the alternate test procedure as set forth in section IV, “Alternate Test Procedure.”

Miele is permitted to make representations about the energy use of this basic model for compliance, marketing, or other purposes only to the extent that such products have been tested in accordance with the provisions set forth in the alternate test procedure and such representations fairly disclose the results of such testing in accordance with 10 CFR 429.19.

DOE makes decisions on waivers and interim waivers for only those basic models specifically set out in the petition, not future models that may be manufactured by the petitioner. Miele may request that DOE extend the scope of a waiver or an interim waiver to include additional basic models employing the same technology as the basic model(s) set forth in the original petition consistent with 10 CFR 430.27(g). In addition, DOE notes that granting of an interim waiver or waiver does not release a petitioner from the certification requirements set forth at 10 CFR part 429. See also 10 CFR 430.27(a) and (i).

The interim waiver shall remain in effect consistent with 10 CFR 430.27(h). Furthermore, this interim waiver is conditioned upon the presumed validity of statements, representations, and documents provided by the petitioner. DOE may rescind or modify a waiver or interim waiver at any time upon a determination that the factual basis underlying the petition for waiver or interim waiver is incorrect, or upon a determination that the results from the alternate test procedure are unrepresentative of the basic model's true energy consumption characteristics. See 10 CFR 430.27(k).

IV. Alternate Test Procedure

EPCA requires that manufacturers use DOE test procedures when making representations about the energy consumption and energy consumption costs of products and equipment covered by the statute. (42 U.S.C. 6293(c); 6314(d)) Consistent representations about the energ